Case Number(s): 08-O-13226; 09-O-15668; 09-O-14365
In the Matter of: Frank Ferris, Bar # 40793, A Member of the State Bar of California, (Respondent).
Counsel For The State Bar: Manuel Jimenez, State Bar of California OCTC/SF
180 Howard Street
San Francisco, CA 94105
(415) 538-2288
Bar # 218234,
Counsel for Respondent: In Pro Per, Frank Joseph Ferris
1113 Castec Drive
Sacramento, CA 95864
Bar # 40793
Submitted to: Assigned Judge – State Bar Court Clerk’s Office San Francisco.
Filed: December 17, 2010.
<<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 December 21, 1967.
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 16 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.
Costs are awarded to the State Bar.
<<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.
9.
ORDER OF INACTIVE ENROLLMENT:
The parties are aware that if this stipulation is approved, the judge will
issue an order of inactive enrollment under Business and Professions Code
section 6007, subdivision (c)(4), and Rules of Procedure of the State Bar, rule
5.111(D)(1).
IN THE MATTER OF: Frank Joseph Ferris, State Bar No. 40793
STATE BAR COURT CASE NUMBER: 08-O-13226; 09-O-15668; 09-O-14365
FACTS AND CONCLUSIONS OF LAW
The Lisa Jenson Matter
Case No. 09-0-15668
1. In May, 1999, Lisa Jensen (formerly Lisa Viviano, hereinafter, "Jensen") hired respondent to represent her in the matter of Lindeleaf v. Viviano, case no. 04AS04718, filed in Superior Court, County of Sacramento. Respondent defended the suit on Jensen’s behalf.
2. On March 6, 2008, Jensen gave respondent a cashier’s check, check no. 384052409, in the sum of $10,000 to pay to Lindeleaf according to the settlement in the matter. Jensen later executed a Settlement Agreement and Mutual Release which specified that the Lindeleafs could file a Stipulated Judgment if Jensen failed to pay the $10,000 to Lindeleaf.
3. Respondent received the $10,000 in funds from Jensen in March, 2008 and thereafter deposited the funds into his attorney-client trust account, account number 170101XXX at Bank of the West (hereinafter, "CTA" account).
4. Shortly thereafter, by on or about April 22, 2008, respondent spent all of Jensen’s funds on matters unrelated to Jensen. On or about April 22, 2008, the balance in respondent’s CTA account was -$4.73.
5. Respondent misappropriated Jensen’s $10,000. By misappropriating $10,000 of Jensen’s money, respondent committed acts of moral turpitude, in willful violation of Business and Professions Code, section 6106.
6. Respondent failed to tell Jensen that he had misappropriated her funds.
7. On March 18, 2009, the plaintiff, Robert Lindeleaf, obtained the Stipulated Judgment against Jensen, for the sum of $80,000, because, (due to respondent’s intervening misconduct), Jensen failed to pay the $10,000 to Lindeleaf.
8. On March 23, 2009, Sahar Akbar, of the Law office of Martin Duetsch and Sosan Akbar (Lindeleaf’s counsels) duly served respondent via mail with the Notice of Entry of Judgment in the Lindeleafv. Viviano matter.
9. Respondent received the Notice of Entry of Judgment in Lindeleafv. Viviano matter and was aware of its contents.
10. Respondent failed to advise Jensen of the Judgment against her for $80,000.
11. Respondent made several false statements to his client regarding the $10,000 in funds, including, but not limited, to the following:
i) On June 24, 2009, respondent promised that he would have the $10,000 in funds transferred back to Jensen’s account "by Friday";
ii) On July 8, 2009, respondent promised that he would have the $10,000 in funds transferred back to Jensen’s account by "tomorrow";
iii) On July 17, 2009, respondent promised Jensen that he would have the $10,000 in funds transferred back to Jensen’s account "today for sure";
12. Respondent did not transfer any funds to Jensen in June or July, 2009. Respondent has not refunded any monies to Jensen whatsoever.
13. On October 23, 2008, respondent advised the Law Offices of Martin Deutsch that he would be wiring the funds "this evening".
14. Respondent did not in fact wire any funds to Martin Deutsch on or about October 23, 2008 or at anytime thereafter.
Conclusions of Law
15. By failing to maintain Jensen’s $10,000 in his CTA account, respondent failed to maintain the balance of funds received for the benefit of a client and deposited in a bank account labeled "Trust Account," "Client’s Funds Account" in willful violation of violated Rules of Professional Conduct, rule 4-100(A).
16. By failing to advise Jensen that he had misappropriated her funds; and by failing to advise her of the $80,000 Judgment against her, respondent failed to communicate significant developments to his client in a matter in which he agreed to provide legal services, in willful violation of Business and Professions Code, section 6068(m).
17. By repeatedly assuring his client he would refund the monies to her, and by failing to do so; and by assuring Martin Deutsch that he would forward the funds, and then failing to do so, respondent committed acts of moral turpitude, in willful violation of Business and Professions Code, section 6106.
18. By failing to appropriately tender the settlement funds on Jensen’s behalf, respondent failed to perform with competence, in willful, reckless and repeated violation of the Rules of Professional Conduct rule 3-110(A).
The Grace Labrasca Matter
Case No. 08-0-13226
19. On April 15, 2004, Grace Labrasca (hereinafter, "Labrasca") hired respondent to represent her in her pending civil matters, Elizabeth Phillips v. Grace Labrasca, case no. 05DV10768, and Labrasca v. Phillips, case no. 05AS03533. Labrasca paid respondent $30,000 for representation in the two matters.
20. On November 18, 2006 while her matters were still pending, respondent requested that Labrasca loan him some funds. Respondent asked Labrasca for $5,000. Labrasca gave respondent a $5,000 loan by writing a check against her credit card. Respondent stated to Labrasca that he would pay her back the following Monday.
21. Respondent failed to pay Labrasca back the following Monday or at any time thereafter.
22. The business transaction (loan) that respondent obtained from Labrasa did not have fair and reasonable terms. There was no collateral for the debt.
23. The terms for the business transaction (loan) that respondent obtained from Labrasa were not in writing.
24. Respondent did not advise Labrasca, in writing (or otherwise), before obtaining the loan, that Labrasca could consult with an attorney before agreeing to loan respondent money.
25. Respondent did not give Labrasca a reasonable opportunity to consult with an attorney before loaning respondent money.
26. Labrasca did not consent to the loan in writing.
27. On November 8, 2008, respondent issued check number 51952, in the sum of $5,000, to Labrasca for repayment of the debt. The check was rejected by the bank as issued against insufficient funds.
28. Respondent failed to make good on the check or otherwise repay Labrasca.
29. On June 29, 2009, Labrasca obtained a judgment against respondent in small claims court, Labrasca v. Ferris, case no 09SC03194, filed in Superior Court, County of Sacramento, for the sum of $5,000 plus costs. The Court Clerk duly noticed respondent, by mail, of the small claims judgment. Respondent received the small claims judgment and was aware of its contents.
30. On October 9, 2009, respondent was to appear for an Order for Examination (hereinafter, "OEX") in the small claims proceedings. By consent of the parties, the OEX was continued for two weeks, until October 29, 2009. On October 29, 2009, respondent failed to appear at the OEX. Thereafter, on or about November 9, 2009, the Court issued a bench warrant against respondent for his failure to appear. Respondent has made payments continuously to satisfy the judgment.
Conclusions of Law
31. By borrowing $5,000 from Labrasca without fair and reasonable terms; without placing the terms in writing; without obtaining Labrasca’s written consent; without advising Labrasca to consult another attorney and without giving her a reasonable opportunity to consult with another attorney, respondent willfully violated Rules of Professional Conduct, role 3-300(A) (B) and (C).
32. By issuing a check to Labrasca against insufficient funds, and failing to make good on the check, by failing to pay Labrasca’s small claims judgment against him; and by failing to appear at the OEX, respondent committed acts of moral turpitude, in willful violation of Business and Professions Code, section 6106.
The Joseph Cesar H
Case Number 09-0-14365
33. On July 10, 2004, Joseph Cesar II (hereinafter, "Cesar") hired respondent to negotiate the termination of a lease on his behalf, for his business. Cesar paid respondent the sum of $2,000 for the representation. Respondent successfully negotiated the lease termination.
34. In July, 2004, Cesar hired respondent to address additional matters regarding a tenancy. Cesar paid respondent the sum of $2,000. Respondent resolved the matter to Cesar’s satisfaction in or about February, 2005.
35. Thereafter, Cesar considered respondent to be his business attorney and consulted with respondent periodically. From in or about February, 2005 through August, 2007, Cesar consulted respondent regarding various legal matters related to his lease liabilities and other issues arising from Cesar’s clothing business, "Catwalk." From on or about August 7, 2009 to the present, Cesar consulted respondent for various investment ventures.
36. On August 7, 2007, respondent borrowed $50,000 from Cesar. The loan was memorialized by a document entitled "promissory note" which stated, "For valuable consideration, receipt of which is hereby acknowledged, Frank J. Ferris hereby agrees to pay to Joe Cesar, or order no later than August 21, 2007, the sum of $52,000."
37. Respondent paid Cesar $2,000, but failed to pay Cesar the principal of $50,000 on August 21, 2007 or at anytime thereafter.
38. Because Respondent did not believe that he represented Cesar, he did not secure any written authorizations.
39. The terms of the loan from Cesar to respondent were not fair and reasonable. There was no collateral for the significant debt.
40. Respondent did not advise Cesar, in writing or otherwise, that he (Cesar) could consult with independent counsel before loaning funds to respondent.
41. Cesar did not consent, in writing, to the terms of the loan.
42. On January 5, 2009, respondent issued check no. 51969 to Cesar in the sum of $50,000, as purported repayment of the debt. This check was issued from respondent’s general office account, account number 170-005XXX at Bank of the West.
43. At on or about the time respondent issued the check for $50,000 to Cesar, there were insufficient funds in his general office account to honor the check. On or about January 1, 2009, there was -$225.41 in respondent’s general office account. The average daily balance in respondent’s general office account for January, 2009 was -$107.00.
44. When he issued the aforementioned check, Respondent informed Cesar that there were no funds in the account, and that he should wait for word from the respondent before negotiating the check.
45. September 8, 2009, Cesar sought to negotiate check no. 51969. The Bank dishonored the check as written against insufficient funds.
Conclusions Of Law
46. By borrowing $50,000 from Cesar without fair and reasonable terms, without obtaining Cesar’s written consent, and without advising Cesar to consult another attorney, and without giving him a reasonable opportunity to consult with another attorney, respondent willfully violated Rules of Professional Conduct, rule 3-300(A)(B) and (C).
PENDING PROCEEDINGS
The disclosure date referred to on page one, paragraph A(7), was November 15, 2010.
COSTS OF DISCIPLINARY PROCEEDINGS.
Respondent acknowledges that the Office of Chief Trial Counsel has informed respondent as of November 15, 2010 the estimate prosecution costs in this matter are approximately $6,158.00. Respondent acknowledges that this figure is an estimate only and that it does not include State Bar Court costs which will be included in any final cost assessment..Respondent further acknowledges that should this stipulation be rejected or should relief from the stipulation be granted, the costs in this matter may increase due to further proceedings.
AUTHORITIES SUPPORTING DISCIPLINE
Standards
Standard 2.2(a) requires disbarment for the willful misappropriation of entrusted funds. The standard requires not less than a one-year actual suspension if the amount of funds is insignificantly small or if the most compelling mitigating circumstances clearly predominate. Neither of those circumstances exist in this matter.
Standard 2.2(b) requires at least a three-month actual suspension for a violation of rule 4100, irrespective of mitigating circumstances.
Standard 2.3 requires an actual suspension or disbarment for a respondent that, has committed an act of moral turpitude. Respondent committed multiple acts of moral turpitude.
Standard 2.10 requires that a violation of any provision of the Rules of Professional Conduct not specified in the standards (e.g., rules 1-300(A) and 1-311) shall result in reproval or suspension according to the gravity of the offense or harm, if any, to the victim, with due regard to the purpose of imposing discipline set forth in standard 1.3.
Level of Discipline
Misappropriation
Disbarment is the proper discipline for misappropriation. (See In re Abbott (1977) 19 Cal.3d 249 [disbarment for misappropriation of over $29,000]; Kaplan v. State Bar (1991) 52 Cal.3d 1067 [disbarment for misappropriation of approximately $30,000 and lies to the State Bar]; Chang v. State Bar (1989) 49 Cal.3d 114 [disbarment for misappropriation of over $7,000]; Kelly v. State Bar (1988) 45 Cal.3d 649 [disbarment for misappropriation of approximately $20,000]; In the Matter of Spaith (Review Dept. 1996) 3 Cal.State Bar Ct.Rptr. 511 [disbarment for misappropriation of approximately $40,000 in one client matter]; In the Matter of Keuker (Review Dept. 1991) 1 Cal.State Bar Ct.Rptr. 583 [disbarment for misappropriation of approximately $66,000 in one client matter].)
Rule 3-300 Violations
Respondent is culpable of violation of rule 3-300 of the California Rules of Professional Conduct because of his ongoing attomey/client relationship with victim Cesar. Case law has held that culpability lay where there is an ongoing attorney/client relationship, regardless of whether the Respondent was representing the victim at the moment.
For instance, In Matter of Peavey, the court held that an attorney/client relationship existed, for the purposes of rule 3-300, where the victim had an ongoing professional relationship with the respondent in which he sought and received legal advice from respondent intermittently. (Matter of Peavey (Review Dept. 2002) 4 Cal. State Bar Ct. Rptr. 483.) Non-clients may be treated as an attorney’s client for purposes of discipline where the attorney assumes a fiduciary relationship with the non-client.
A loan from a client, like all attorney-client business transactions, is scrutinized for unfairness, and when such a transaction is called into question, the attorney has the burden to prove that the terms were fair and reasonable. Where a client’s loan to attorney was unsecured in a situation where security would ordinarily be considered essential, such as the situation in the instant case, and where no periodic payments were made despite his client’s financial circumstances, such facts were evidence that terms and conditions of the loan were unfair to the client. (Matter of Johnson (Review Dept. 1995) 3 Cal. State Bar Ct. Rptr. 233; Matter of Hagen (Review Dept. 1992) 2 Cal. State Bar Ct. Rptr. 153.)
AGGRAVATING CIRCUMSTANCES
Respondent’s nine counts of misconduct, which occurred over at least a four year period, demonstrate multiple acts of wrongdoing (std. 1.2(b)(ii).)
Most telling is the harm that respondent’s misconduct reaped on his clients (std. 1.2(b)(iv)). In the case of Lisa Jensen, not only did respondent misappropriate ten-thousand dollars ($10,000), his failure to utilize that money resulted in Lisa Jensen having an $80,000 stipulated judgment entered against her. In the case of Joseph Cesar II, respondent misappropriated fifty-thousand dollars ($50,000), and subsequently gave a check to Cesar drawn on an account that he knew, or should have known, did not have any funds in it. When Cesar attempted to negotiate the check, the bank closed his account. The California Supreme Court has held that An act of dishonesty warrants actual suspension or disbarment, even if no harm results to the client. (Garlow v. State Bar (1982) 30 Cal.3d 912.) In the instant matter, the clients sustained substantial harm.
MITIGATING CIRCUMSTANCES
None
STATE BAR ETHICS SCHOOL
Since this is a disbarment case, no Ethics School is required.
RESTITUTION
Respondent must make restitution, as follows:
Lisa Jenson; Respondent must make restitution in the amount of $10,000 plus 10 percent interest per year from April 22, 2010.
Grace Labrasca; Respondent must continue to make payments to Grace Labrasca, in accordance with judgment entered against him in the case of Labrasca v. Ferris, case no. 09SC03194, Superior Court for the County of Sacramento.
Joseph Cesar II; Respondent must make restitution in the amount of $50,000 plus 10 percent interest per year from August 21, 2007.
If the Client Security Fund has reimbursed the aforementioned persons for all or any portion of the principal amount, respondent must make restitution to CSF of the amount paid plus interest and costs in accordance with Business and Professions Code section 6140.5. Respondent must pay the above restitution and furnish satisfactory proof of payment to the State Bar’s Office of Probation in Los Angeles, no later than 365 days from the effective date of the Supreme Court order in this case.
SIGNATURE OF THE PARTIES
Case Number(s): 08-O-13226; 09-O-15668; 09-O-14365
In the Matter of: Frank Joseph Ferris
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: Frank Joseph Ferris
Date: November 15, 2010
Respondent’s Counsel:
Date:
Deputy Trial Counsel: Manuel Jimenez
Date: November 17, 2010
Case Number(s): 08-O-13226, 08-O-15668, 09-O-14365
In the Matter of: Frank Joseph Ferris
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 5.58 (E) & (F), 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 9.18(a), California Rules of Court.)
Respondent Frank Joseph Ferris is ordered transferred to involuntary inactive status pursuant to Business and Professions Code section 6007, subdivision (c)(4). Respondent’s inactive enrollment will be effective three (3) calendar days after this order is served by mail and will terminate upon the effective date of the Supreme Court’s order imposing discipline herein, or as provided for by rule 490(b) or the Rules of Procedure of the State Bar of California, or as otherwise ordered by the Supreme Court pursuant to its plenary jurisdiction.
Signed by:
Judge of the State Bar Court: Patricia McElroy
Date: December 17, 2010
[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 an Francisco, on December 17, 2010, 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:
FRANK JOSEPH FERRIS
2235 PARK TOWNE CIR #100
SACRAMENTO, CA 95825
FRANK JOSEPH FERRIS
113 CASTEC DRIVE
SACRAMENTO, CA 95864
checked. by interoffice mail through a facility regularly maintained by the State Bar of California addressed as follows:
MANUEL JIMENEZ, Enforcement, San Francisco
I hereby certify that the foregoing is true and correct. Executed in San Francisco, California, on December 17, 2010.
Signed by:
Bernadette C.O. Molina
Case Administrator
State Bar Court