Case Number(s): 10-O-4445
In the Matter of: Audrey Marie Ritter, Bar # 212840, A Member of the State Bar of California, (Respondent).
Counsel For The State Bar: Erin McKeown Joyce
Deputy Trial Counsel
State Bar of California
1149 South Hill Street
Los Angeles, CA 90015-2299
Telephone: (213) 765-1356
Bar # 149946
Counsel for Respondent: Paul Jean Virgo
9909 Topanga Boulevard
Suite 282
Chatsworth, CA 91311
(310)666-9701
Bar # 67900
Submitted to: Assigned Judge – State Bar Court Clerk’s Office San Francisco.
Filed: March 12, 2012.
<<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 May 7, 2001.
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 11 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: 2013 and 2014. (Hardship, special circumstances or other good cause per rule 5.132, Rules of Procedure.) 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.
<<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.
IN THE MATTER OF: Audrey Marie Ritter, State Bar No. 212840
STATE BAR COURT CASE NUMBER: 10-O-4445
PENDING PROCEEDINGS:
The disclosure date referred to on page two, paragraph A.(7), was February 16, 2012.
Respondent admits that the following facts are true and that she is culpable of violations of the specified Rules of Professional Conduct:
FACTS
1. On June 16, 2009, Heykyung and Jongbo Kim hired Respondent for forensic debt mitigation services to be provided over a five year period to resolve the Kims’ unsecured debt totaling over $240,000. At the same time, the Kims hired Respondent for loan modification services on one of their real properties.
Debt Mitigation Services
2. Under the attorney-client agreement with Respondent for the debt mitigation program, the Kims were obligated to pay legal fees and other related fees in the amount of $2,473.44 each month, and to accrue sufficient monies in an escrow account for Respondent to use to negotiate with the Kims’ creditors. Pursuant to the agreement, the Kims were required to pay Respondent a total legal fee of $36,066.60 for the debt mitigation services over the five year period.
3. During the first seven months of the program, the Kims paid Respondent legal fees of $11,220.67 pursuant to the contract with Respondent.
4. In late 2009, the Kims learned that one of their major debts involving a corporation owned by the Kims was secured, and not subject to Respondent’s debt mitigation services.
5. In January 2010, the Kims terminated Respondent and requested a full refund and an accounting of the $11,220.67 they paid as legal fees to Respondent while they participated in the debt mitigation program.
6. Despite her receipt of the request for an accounting and a full refund, Respondent failed to provide the Kims with an accounting for her services related to the debt mitigation program until after she was contacted by the State Bar.
Loan Modification Services
7. Respondent was also hired to perform loan modification services for the Kims at the time they hired her for the debt mitigation services.
8. The Kims paid $3,195 for the loan modification services to Respondent.
9. By January 2010, the Kims decided to forego the loan modification and to pursue instead a short sale of the real property which was the subject of the loan modification services.
10. On January 15, 2010, the Kims demanded a refund of $1,597.50 for the loan modification services from Respondent, which they calculated to be half of the legal fees they paid Respondent.
11. Despite her receipt of the request for a refund for the loan modification services, Respondent failed to provide the Kims with an accounting for her services related to the loan modification until after she was contacted by the State Bar.
12. At the time the Kims terminated Respondent and requested a full refund for both the debt mitigation services and the loan modification services, Respondent’s employee, Lynie Hjrlmstad, provided the Kims with two mutual release forms, under which the Kims would agree to release all their claims or potential claims against Respondent for payment of $1,300 and $1,597.50, respectively.
13. The mutual releases were sent to the Kims on January 29, 2010 and February 4, 2010.
14. The mutual releases failed to provide the Kims with notice of their right to seek an independent lawyer’s advice of the clients’ choice about regarding the settlement.
CONCLUSIONS OF LAW
By failing to timely provide the Kims with an accounting at the time she was terminated for the debt mitigation services and loan modification services, Respondent failed to render appropriate accounts to a client regarding all funds coming into Respondent’s possession in wilful violation of Rule of Professional Conduct 4-100(B)(3).
By providing to the Kims the two mutual releases that failed to give the required notice to the Kims of their right to seek the review of an independent lawyer of the settlement, Respondent attempted to settle a claim or potential claim for Respondent’s liability to the client for Respondent’s professional malpractice, without informing the client in writing that the client may seek the advice of an independent lawyer of the client’s choice regarding the settlement and giving the client a reasonable opportunity to seek that advice in wilful violation of Rule of Professional Conduct 3-400(B).
AUTHORITIES SUPPORTING DISCIPLINE
STANDARDS FOR ATTORNEY SANCTIONS
To determine the appropriate level of discipline, the standards provide guidance. Drociak v. State Bar (1991) 52 Cal.3d 1085; In the Matter of Sampson, 3 Cal. State Bar Ct. Rptr. 119. A disciplinary recommendation must be consistent with the discipline in similar proceedings. See Snyder v. State Bar (1990) 49 Cal.3d 1302. Also, the recommended discipline must rest upon a balanced consideration of relevant factors. In the Matter of Sampson, 3 Cal. State Bar Ct. Rptr. 119.
Pursuant to Standard 1.3 of the Standards for Attorney Sanctions for Professional Misconduct:
The primary purposes of disciplinary proceedings conducted by the State Bar of California and of sanctions imposed upon a finding or acknowledgment of a member’s professional misconduct are the protection of the public, the courts and the legal profession; the maintenance of high professional standards by attorneys and the preservation of public confidence in the legal profession.
Pursuant to Standard 1.6(a) of the Standards for Attorney Sanctions for Professional Misconduct:
The appropriate sanction for an act of professional misconduct shall be set forth in the following standards for the particular act of misconduct found or acknowledged. If two or more acts of professional misconduct are found or acknowledged in a single disciplinary proceeding, and different sanctions are prescribed by these standards for said acts, the sanctions imposed shall be the more or the most severe of the different application sanctions.
Pursuant to Standard 2.2(b) of the Standards for Attorney Sanctions for Professional Misconduct:
Culpability of a member of commingling of entrusted funds or property with personal property or the commission of another violation of rule 4-100, Rules of Professional Conduct, none of which offenses result in the willful misappropriation of entrusted funds or property shall result in at least a three month actual suspension, from the practice of law, irrespective of mitigating circumstances.
Pursuant to Standard 2.10 of the Standards for Attorney Sanctions for Professional Misconduct:
Culpability of a member of a violation of any of the Business and Profession Code not specified in these standards or of a wilful violation of any Rule of Professional Conduct not specified in these standards shall result in reproval or suspension according to the gravity of the offense or the harm, if any, to the victim, with due regard to the purposes of imposing discipline set forth in standard 1.3.
Respondent violated Rule of Professional Conduct 4-100(B)(3), in delaying providing a refund to one client, and Rule of Professional Conduct 3-400(B), by failing to give notice to the clients of their right to seek the counsel of an independent attorney in deciding whether to settle their potential claims against Respondent. The courts have found that a sanction lesser than three months actual suspension is warranted in cases, such as here, where the Respondent’s trust account violation is technical in nature, or where Respondent has established significant mitigation. In the Matter of Respondent E (Review Dept. 1991) 1 Cal. State Bart Ct. Rptr. 716. Here, at the time of the delay in providing the accounting, Respondent was in the last part of her first pregnancy and then dealing with a newborn at home. She was taking time to be home with her new baby, and not in the office full-time for several months. She did belatedly provide the accounting to the clients.
The stipulated discipline of a one year stayed suspension is sufficient to advance the purposes of the imposition of attorney discipline in these matters.
FURTHER AGREEMENTS OF THE PARTIES
The factual statements contained in this Stipulation constitute admissions of fact and may not be withdrawn by either party, except with court approval.
COSTS
Respondent acknowledges that the Office of the Chief Trial Counsel has informed him that as of February 16, 2012, the estimated costs in this matter are $3,500. 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 the cost of further proceedings.
SIGNATURE OF THE PARTIES
Case Number(s): 10-O-04445
In the Matter of: Audrey Marie Ritter
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: Audrey Marie Ritter
Date: February 16, 2012
Respondent’s Counsel: Paul Jean Virgo
Date: February 16, 2012
Deputy Trial Counsel: Erin McKeown Joyce
Date: February 16, 2012
Case Number(s): 11-O-0445
In the Matter of: Audrey Marie Ritter
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.)
Signed by:
Judge of the State Bar Court: Patricia McElroy
Date: March 12, 2012
[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 San Francisco, on March 12, 2012, 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:
PAUL JEAN VIRGO
9909 TOPANGA BLVD #282
CHATSWORTH, CA 91311
<<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:
Erin Joyce, Enforcement, Los Angeles
I hereby certify that the foregoing is true and correct. Executed in San Francisco, California, on March 12, 2012
Signed by:
George Hue
Case Administrator
State Bar Court