Case Number(s): 10-O-05022; 10-O-08267; 10-O-10594; 10-O-10596; 10-O-10996; 10-O-11200; 11-O-10408; 11-O-12668; 11-O-12674:11-O-13348; 11-O-13942; 11-O-14551; 11-O-14636; 11-O-14752; 11-O-14753; 11-O-15203; 11-O-15403
In the Matter of: Nicholas O. Hedding
1600 N. Broadway Ste. 700
Santa Ana, CA 92706
Bar # 227160, A Member of the State Bar of California, (Respondent).
Counsel For The State Bar: Jessica A. Lienau
Office of the Chief Trial Counsel
1149 S. Hill St.
Los Angeles, CA 90015
Bar # 269753
Counsel for Respondent: Paul J. Virgo
9909 Topanga Blvd. # 282
Chatsworth, CA 91311
Bar # 67900
Submitted to: Assigned Judge, State Bar Court Clerk’s Office Los Angeles.
Filed: November 14, 2011
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 2, 2003.
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 29 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 5.130, Rules of Procedure.
checked Costs are to be paid in equal amounts prior to February 1 for the following membership years: the two (2) years following the effective date of this order. (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: Nicholas O. Hedding State Bar No. 227160
STATE BAR COURT CASE NUMBER: 10-O-05022; 10-O-08267; 10-O-10594; 10-O-10596; 10-O-10996; 10-O-11200; 11-O-10408; 11-O-12668; 11-O-12674; 11-O-13348; 11-O-13942; 11-O-14551; 11-O-14636; 11-O-14752; 11-O-14753; 11-O-15203; 11-O-15403
FACTS AND CONCLUSIONS OF LAW.
Respondent admits that the following facts are true and that he is culpable of violations of the
specified statutes and/or Rules of Professional Conduct.
Case No. 10-O-05022: Violation of California Civil Code § 2944.7(a):
At all times herein relevant, Respondent owned and operated the American Law Firm ("ALF").
On or about February 1, 2010, Rodolfo and Martha Anaya (collectively "the Anayas") were provided with Respondent’s "Retainer Agreement," which indicates that Respondent would be the Anayas’attorney. A "Privileged Attorney-Client Addendum to Retainer" was included with the "Retainer Agreement," wherein Respondent informed the Anayas that the services Respondent was to provide would be provided in two phases, specifically delineated as Exhibits A1 and A2 in the "Privileged Attorney-Client Addendum to Retainer." Exhibit A1 states that the first "phase" of loan modification services to be provided by Respondent and ALF included, "Audit, Compile, Underwrite, Take Legal Steps," and that the cost of the services for the first "phase" outlined in Exhibit A1 was $1,200.00. Exhibit A2 states that the second "phase" of loan modification services to be provided by Respondent and ALF included, Submission,Verification, Confirmation, Review, Monitor and Update, Live Contact, and Initiat[ing] Direct Contact with Lender," and that the cost of the services for the second "phase" outlined in Exhibit A2 was $1,200.00.
On or about February 1, 2010 the Anayas signed the "Retainer Agreement" as well as the "Privileged Attorney-Client Addendum to Retainer," which included both Exhibits A1 and A2. On or about February 19, 2010, Respondent charged and collected $1,200.00 in advanced attorney fees from the Anayas before fully performing each and every service he had contracted to perform or represented that he would perform. By negotiating, arranging and offering to perform a mortgage loan modification for a fee paid by the Anayas, and demanding, charging, collecting and receiving $1,200.00 from the Anayas prior to fully performing each and every service he had contracted to perform or represented that he would perform, in violation Section 2944.7(a)(1) of the Civil Code, Respondent wilfully violated Business and Professions Code section 6106.3.
Case No. 10-O-08267: Unauthorized Practice of Law in Another Jurisdiction, Illegal Fee, and Violation of California Civil Code § 2944.7(a):
The laws of the State of Arizona, including the Arizona Ethics Rules, prohibit attorneys not licensed in Arizona from practicing law in Arizona subject to several limited exceptions. Respondent is not presently, and never has been, admitted to practice law in the state of Arizona and Respondent was not otherwise entitled to practice law in the State of Arizona during the time period addressed in this Notice of Disciplinary Charges.
At all times herein relevant, Respondent owned and operated ALF. At all times herein relevant, Teresa Murphy ("Murphy") resided in Arizona. On or about March 7, 2010, Respondent accepted the representation of Murphy, in order to negotiate and obtain for Murphy a home mortgage loan modification for her Arizona property. Murphy signed Respondent’s "Retainer Agreement" on or about March 7, 2010. In a "Privileged Attorney-Client Addendum to Retainer," signed by Murphy on March 7, 2010, Respondent informed Murphy that the services Respondent was to provide would be provided in two phases, specifically delineated as Exhibits A1 and A2 in the "Privileged Attorney-Client Addendum to Retainer." Exhibit A1 states that the first "phase" of loan modification services to be provided by Respondent and ALF included, "Audit, Compile, Underwrite, Take Legal Steps," and that the cost of the services for the first "phase" outlined in Exhibit A1 was $1,247.50. Exhibit A2 states that the second "phase" of loan modification services to be pro’eided by Respondent and ALF included, "Submission, Verification, Confirmation, Review, Monitor and Update, Live Contact, and Initiat[ing] Direct Contact with Lender," and that the cost of the services for the second "phase" outlined in Exhibit A2 was $1,247.50.
On or about March 23, 2010, Respondent and agents acting on behalf of Respondent negotiated with Murphy’s primary Arizona residence home loan mortgage lender, National City Mortgage, regarding the modification of Murphy’s home loan mortgage. On or about April 6, 2010, Respondent, through ALF, charged and collected $1,247.50 in advance attorney fees from Murphy. On or about May 5, 2010, Respondent, through ALF, charged and collected $1,247.50 in advance attorney fees from Murphy. On or about June 2010, Murphy spoke with an ALF employee on the telephone about the status of her loan modification and the ALF employee stated that ALF had initiated the loan modification process with National City Mortgage, the lender for Murphy’s primary residence. Murphy requested that Respondent initiate the loan modification process on her investment property with Bank of America, which she believed she had retained Respondent to obtain a loam modification on. On or about June 29, 2010, Respondent, and agents acting on behalf of Respondent negotiated with Murphy’s investment property lender, Bank of America, regarding the modification of Murphy’s investment property home loan mortgage. On or about June 29, 2010, Respondent, and agents acting on behalf of Respondent attempted to persuade the foreclosing party to rescind the trustee sale set for June 30, 2010 on Murphy’s Arizona investment property. At no point did Respondent associate with an attorney licensed to practice in Arizona on Murphy’s home loan mortgage modification matter. By accepting representation of Murphy as a client, collecting an advanced attorney fee and negotiating with Murphy’s lender, Respondent willfully engaged in the unauthorized practice of law in violation of the regulations of the profession in Arizona in wilful violation of rule 1-300(B), Rules of Professional Conduct. By accepting representation of Murphy and charging and collecting fees from Murphy, when he was not licensed to practice law in Arizona, Respondent willfully entered into an agreement for, charged, and collected an illegal fee from Murphy in wilful violation of rule 4-200(A), Rules of Professional Conduct. By negotiating, arranging and offering to perform a mortgage loan modification for a fee paid by Murphy, and demanding, charging, collecting and receiving $2,495.00 from Murphy prior to fully performing each and every service he had contracted to perform or represented that he would perform, in violation Section 2944.7(a)(1) of the Civil Code, Respondent wilfully violated Business and Professions Code section 6106.3. Case No. 10-O-10594: Violation of California Civil Code Section 2944.7(a) and 2944.6(a), Seeking an Agreement to Withdraw a State Bar Complaint:
At all times herein relevant, Respondent owned and operated ALF. On or about October 23, 2009, Respondent accepted the representation of Robyn L. Davidoff ("Davidoff"), a resident of California, in order to negotiate and obtain for Davidoff a home mortgage loan modification for her Nevada investment property. Davidoff signed Respondent’s "Retainer Agreement" on or about October 23, ~2009, and Respondent signed the "Retainer Agreement" on or about November 9, 2009. Respondent’s "Retainer Agreement" states that his services will include "tak[ing] any legal action necessary to protect Clients’ [Davidoff’s] rights arising in law and in equity against Clients’ [Davidoff’s] lenders, brokers and related entities and individuals which have placed Clients [Davidoff] in financial dire straits." On or about November 23, 2009, Respondent charged and collected $3,695.00 in advanced attorney fees from Davidoff before fully performing each and every service he had contracted to perform or represented that he would perform. Respondent did not provide Davidoff, prior to entering into a fee agreement for loan modification or loan forbearance services, with the following written statement:
It is not necessary to pay a third party to arrange for a loan modification or other form of forbearance from your mortgage lender or servicer. You may call your lender directly to ask for a change in your loan terms. Nonprofit housing counseling agencies also offer these and other forms of borrower assistance free of charge. A list of nonprofit housing counseling agencies approved by the United States Department of Housing and Urban Development (HUD) is available from your local HUD office or by visiting www.hud.gov. After retaining Respondent on or about October 23, 2009, Davidoff subsequently became dissatisfied with Respondent’s services, and on or about October 4, 2010, Davidoff filed a written complaint against Respondent with the State Bar. On or about June 1, 2011, Respondent sent to Davidoff, via U.S. mail, a written settlement offer whereby Respondent offered to pay Davidoff $1,500.00 in exchange for Davidoff’s withdrawal of all complaints and all claims. A "General Liability Release Letter" was enclosed with Respondent’s June 1, 2011 letter which states, "It is the specific intent and purpose of this instrument to release and discharge any and all claims and causes of action of any kind or nature whatsoever, including, but not limited to the pending California State Bar complaint... [.]" Davidoff received this letter with the enclosed "General Liability Release Letter." By negotiating, arranging and offering to perform a mortgage loan modification for a fee paid by Davidoff, and demanding, charging, collecting and receiving $3,695.00 from Davidoff prior to fully performing each and every service he had contracted to perform or represented that he would perform, in violation Section 2944.7(a)(1) of the Civil Code, Respondent wilfully violated Business and Professions Code section 6106.3.
By negotiating, arranging and offering to perform a mortgage loan modification for a fee paid by Davidoff in advance of any service and thereafter entering into a fee agreement with Davidoff without providing her, prior to entering into the agreement, the separate statement, in not less than 14-point bold type, specifically proscribed in Section 2944.6(a) of the Civil Code, respondent wilfully violated Business and Professions Code section 6106.3. By asking Davidoffto agree to withdraw her complaint with the State Bar against Respondent in exchange for Respondent paying her in the amount of $1,500.00, Respondent sought an agreement that a plaintiff would withdraw a disciplinary complaint in willful violation of Business and Professions Code, section 6090.5(a)(2), by agreeing or seeking agreement that a plaintiff would withdraw a disciplinary complaint or would not cooperate with the investigation or prosecution conducted by the disciplinary agency.
Case No. 10-O- 10596: Unauthorized Practice of Law in Another Jurisdiction and Illegal Fee:
The laws of the State of Virginia, including the Virginia Rules of Professional Conduct, prohibit attorneys not licensed in Virginia from practicing law in Virginia subject to several limited exceptions. Respondent is not presently, and never has been, admitted to practice law in the state of Virginia and Respondent was not otherwise entitled to practice law in the State of Virginia during the time period addressed in this Notice of Disciplinary Charges. At all times herein relevant, Respondent owned and operated ALF. At all times herein relevant, Bobby and Barbara Martin (collectively "the Martins") resided in Virginia. On or about September 30, 2009, Respondent accepted the representation of the Martins, in order to negotiate and obtain for the Martins a home mortgage loan modification for their Virginia residential property. The Martins signed Respondent’s "Legal Retainer Agreement" on or about September 30, 2009, and Respondent signed the "Legal Retainer Agreement" on or about October 15, 2009. Respondent’s "Legal Retainer Agreement" states that his services will include "negotiat[ing] more favorable or more affordable terms for Client [the Martins] with Client’s [the Martins’] lender." On or about October 10, 2009, Respondent, through ALF, charged and collected $1,247.50 in advance attorney fees from the Martins. On or about November 10, 2009, Respondent, through ALF, charged and collected $1,247.50 in advance attorney fees from the Martins. Between on or around October 2009, and on or around February 2010, Respondent and agents acting on behalf of Respondent negotiated with the Martins’ home loan mortgage lender regarding the modification of the Martins’ home loan mortgage. At no point did Respondent associate with an attorney licensed to practice in Virginia on the Martins’ home loan mortgage modification matter. By accepting representation of the Martins as clients, collecting an advanced attorney fee and negotiating with the Martins’ lender, Respondent willfully engaged in the unauthorized practice of law in violation of the regulations of the profession in Virginia in wilful violation of rule 1-300(B), Rules of Professional Conduct. By accepting representation of the Martins and charging and collecting fees from the Martins, when he was not licensed to practice law in Virginia, Respondent willfully entered into an agreement for, charged, and collected an illegal fee from the Martins in wilful violation of rule 4-200(A), Rules of Professional Conduct.
Case No. 10-O-10996: Failure to Perform and Failure to Return Unearned Fees:
On or about April 9, 2010, Gnouni Gegamyan ("Gegamyan") hired Respondent to file a Chapter 7 Bankruptcy petition on his behalf. On or about April 9, 2010, Gegamyan paid Respondent $1399.00 in attorney fees. Respondent never filed a Bankruptcy petition on behalf of Gegamyan. Respondent has refunded no part of the $1399.00 in advance attorney fees paid by Gegamyan. Respondent wilfully violated Rules of Professional Conduct, rule 3-110(A), by intentionally, recklessly, or repeatedly failing to perform legal services with competence by failing to file the bankruptcy petition on behalf of Gegamyan. Respondent wilfully violated Rules of Professional Conduct, rule 3-700(D)(2), by failing to refund promptly any part of a fee paid in advance that has not been earned by failing to refund the $1399.00 paid by Gegamyan in advance attorney fees.
Case No. 10-O- 11200: Unauthorized Practice of Law in Another Jurisdiction, Illegal Fee, Violation of California Civil Code § 2944.7(a):
The laws of the State of Virginia, including the Virginia Rules of Professional Conduct, prohibit attorneys not licensed in Virginia from practicing law in Virginia subject to several limited exceptions. Respondent is not presently, and never has been, admitted to practice law in the state of Virginia and Respondent was not otherwise entitled to practice law in the State of Virginia during the time period addressed in this Notice of Disciplinary Charges. At all times herein relevant, Respondent owned and operated ALF. At all times herein relevant, Sayed Shah ("Shah") resided in Virginia. On or about April 1, 2010, Respondent accepted the representation of Shah, in order to negotiate and obtain for Shah a home mortgage loan modification for his Virginia residential property. Shah signed Respondent’s "Retainer Agreement" on or about April 1, 2010, and Respondent signed the "Retainer Agreement" on or about April 29, 2010. In the "Privileged Attorney-Client Addendum to Retainer," signed by Shah on April 1, 2010, Respondent informed Shah that the services Respondent was to provide would be provided in two phases, specifically delineated as Exhibits A1 and A2 in the "Privileged Attorney-Client Addendum to Retainer." Exhibit A1 states that the first "phase" of loan modification services to be provided by Respondent and ALF included, "Audit, Compile, Underwrite, Take Legal Steps," and that the cost of the services for the first "phase" outlined in Exhibit A1 was $1,747.50. Exhibit A2 states that the second "phase" of loan modification services to be provided by Respondent and ALF included, Submission,Verification, Confirmation, Review, Monitor and Update, Live Contact, and Initiat[ing] Direct Contact with Lender," and that the cost of the services for the second "phase" outlined in Exhibit A2 was $1,747.50.
In or around April 2010, Respondent and agents acting on behalf of Respondent negotiated with Shah’s home loan mortgage lender regarding the modification of Shah’s home loan mortgage. On or about May 10, 2010, Respondent, through ALF, charged and collected $1,747.50 in advance attorney fees from Shah. On or about June 15, 2010, Respondent, through ALF, charged and collected $873.75 in advance attomey fees from Shah. On or about July 31, 2010, Respondent, through ALF, charged and collected $837.75 in advance attorney fees from Shah. At no point did Respondent associate with an attorney licensed to practice in Virginia on Shah’s home loan mortgage modification matter. On or about November 7, 2010, Shah filed a written complaint against Respondent with the State Bar. On or about April 17, 2011, the State Bar received a facsimile dated April 15, 2011, wherein Attomey Virgo notified the State Bar that he represents Respondent "in any and all matters pending with the State Bar." By accepting representation of Shah as a client, collecting an advanced attorney fee and negotiating with Shah’s lender, Respondent willfully engaged in the unauthorized practice of law in violation of the regulations of the profession in Virginia in wilful violation of rule 1-300(B), Rules of Professional Conduct. By accepting representation of Shah and charging and collecting fees from Shah, when he was not licensed to practice law in Virginia, Respondent willfully entered into an agreement for, charged, and collected an illegal fee from Shah in wilful violation of rule 4-200(A), Rules of Professional Conduct. By negotiating, arranging and offering to perform a mortgage loan modification for a fee paid by Shah, and demanding, charging, collecting and receiving $3,459.00 from Shah prior to fully performing each and every service he had contracted to perform or represented that he would perform, in violation Section 2944.7(a)(1) of the Civil Code, Respondent wilfully violated Business and Professions Code section 6106.3.
Case No. 11-O-10408: Failure to Perform and Failure to Obey a Court Order:
On or about April 12, 2010, Mun and Erika Song (collectively "the Songs") hired Respondent to file a Chapter 7 Bankruptcy petition on their behalf. On or about April 13, 2010, the Songs paid Respondent $250.00 in attorney fees. On or about May 6, 2010, the Songs paid Respondent $1,750.00 in attorney fees. On or about May 7, 2010, Respondent filed a Chapter 7 Bankruptcy petition on behalf of the Songs, Case No. 6:10-bk-23925-CB, U.S. Bankruptcy Court, Central District of California. Respondent failed to appear at the 341 (a) meeting of creditors on or around June 2010. Respondent failed to provide necessary documents on behalf of the Songs to the Bankruptcy trustee. Respondent failed to appear at the reschedule 341(a) creditors meeting on or around January 5, 2011.
The Songs asked the Bankruptcy Court to dismiss their case so that they could refile with new counsel. The Bankruptcy Court granted this Motion on or about January 7, 2011. On or about January 24, 2011, the Bankruptcy Court ordered Respondent to disgorge, within ten days, the $2,000.00 in fees the Songs had paid him. Respondent was to make a check payable to the Songs and deliver it to the Bankruptcy Trustee. To date, Respondent has disgorged no part of the $2,000.00 in fees to the Songs. Respondent wilfully violated Rules of Professional Conduct, rule 3-110(A), by intentionally, recklessly, or repeatedly failing to perform legal services with competence by failing to appear for the Songs at the 341(a) creditors meetings. Respondent wilfully violated Business and Professions Code, section 6103, by wilfully disobeying or violating an order of the court requiring him to do or forbear an act connected with or in the course of Respondent’s profession which he ought in good faith to do or forbear by failing to disgorge the fees paid by the Songs.
Case No. 11-O-12674: Unauthorized Practice of Law in Another Jurisdiction, Illegal Fee, Violation of California Civil Code § 2944.7(a) and 2944.6(a):
The laws of the State of Arizona, including the Arizona Ethics Rules, prohibit attorneys not licensed in Arizona from practicing law in Arizona subject to several limited exceptions. Respondent is not presently, and never has been, admitted to practice law in the state of Arizona and Respondent was not otherwise entitled to practice law in the State of Arizona during the time period addressed .in this Notice of Disciplinary Charges. At all times herein relevant, respondent owned and operated ALF. At all times herein relevant, Mary Swaidner ("Swaidner") resided in Arizona. On or about December 2009, Respondent accepted the representation of Swaidner, in order to negotiate and obtain for Swaidner a home mortgage loan modification for her Arizona residential property. On or about December 2009, Respondent charged and collected $831.00 in advance attorney fees from Swaidner. On or about January 2010, Respondent charged and collected $831.00 in advance attorney fees from Swaidner. Between on or around December 2009, and on or around May 2010, Respondent and agents acting on behalf of Respondent negotiated with Swaidner’s home loan mortgage lender regarding the modification of Swaidner’s home loan mortgage. At no point did Respondent associate with an attorney licensed to practice in Arizona on Swaidner’s home loan mortgage modification matter. Respondent did not provide Swaidner, prior to entering into a fee agreement for loan modification or loan forbearance services, with the following written statement: It is not necessary to pay a third party to arrange for a loan modification or other form of forbearance from your mortgage lender or servicer. You may call your lender directly to ask for a change in your loan terms. Nonprofit housing counseling agencies also offer these and other forms of borrower assistance free of charge. A list of nonprofit housing counseling agencies approved by the United States Department of Housing and Urban Development (HUD) is available from your local HUD office or by visiting www.hud.gov. By accepting representation of Swaidner as a client, collecting an advanced attorney fee and negotiating with Swaidner’s lender, Respondent willfully engaged in the unauthorized practice of law in violation of the regulations of the profession in Arizona in wilful violation of rule 1-300(B), Rules of Professional Conduct. By accepting representation of Swaidner and charging and collecting fees from Swaidner, when he was not licensed to practice law in Arizona, Respondent willfully entered into an agreement for, charged, and collected an illegal fee from Swaidner in wilful violation of rule 4-200(A), Rules of Professional Conduct.
By negotiating, arranging and offering to perform a mortgage loan modification for a fee paid by Swaidner, and demanding, charging, collecting and receiving $1,000.00 from Swaidner prior to fully performing each and every service he had contracted to perform or represented that he would perform, in violation Section 2944.7(a)(1) of the Civil Code, Respondent wilfully violated Business and Professions Code section 6106.3. By negotiating, arranging and offering to perform a mortgage loan modification for a fee paid by Swaidner in advance of any service and thereafter entering into a fee agreement with Swaidner without providing her, prior to entering into the agreement, the separate statement, in not less than 14-point bold type specifically proscribed in Section 2944.6(a) of the Civil Code, Respondent wilfully violated Business and Professions Code section 6106.3.
Case No. 11-O-12668: Unauthorized Practice of Law in Another Jurisdiction and Illegal Fee:
The laws of the State of Nevada, including the Nevada Rules of Professional Conduct, prohibit
attorneys not licensed in Nevada from practicing law in Nevada subject to several limited exceptions. Respondent is not presently, and never has been, admitted to practice law in the state of Nevada and Respondent was not otherwise entitled to practice law in the State of Nevada during the time period addressed in this Notice of Disciplinary Charges. At all times herein relevant, Respondent owned and operated ALF. At all times herein relevant, Toshihiro Endo ("Endo") resided in Nevada. On or about May 12, 2009, Respondent accepted the representation of Endo, in order to negotiate and obtain for Endo a home mortgage loan modification for his Nevada residential property. Respondent’s "Legal Retainer Agreement" states that his services will include "negotiating more favorable or more affordable terms for Client [Endo] with Client’s [Endo’s] lender."
On or about May 12, 2009, Respondent charged and collected $1,200.00 in advance attorney fees from Endo. On or about June 10, 2009, Respondent charged and collected $1,200.00 in advance attorney fees from Endo.
Between on or around May 2009, and on or around March 2011, Respondent and agents acting on behalf of Respondent negotiated with Endo’s home loan mortgage lender regarding the modification of Endo’s home loan mortgage. At no point did Respondent associate with an attorney licensed to practice in Nevada on Endo’s home loan mortgage modification matter. By accepting representation of Endo as a client, collecting an advanced attorney fee and negotiating with Endo’s lender, Respondent willfully engaged in the unauthorized practice of law in violation of the regulations of the profession in Nevada in wilful violation of rule 1-300(B), Rules of Professional Conduct.
By accepting representation of Endo and charging and collecting fees from Endo, when he was not licensed to practice law in Nevada, Respondent willfully entered into an agreement for, charged, and collected an illegal fee from Endo in wilful violation of rule 4-200(A), Rules of Professional Conduct.
Case No. 11-O- 13348: Violation of California Civil Code § 2944.7(a) and 2944.6(a):
At all times herein relevant, Respondent owned and operated ALF. On or about March 19, 2010, Respondent accepted the representation of Reza Chitgar ("Chitgar"), a resident of California, in order to negotiate and obtain for Chitgar a home mortgage loan modification for her residential property. On or about March 22, 2010, Respondent charged and collected $1,000.00 in advanced attorney fees from Chitgar before fully performing each and every service he had contracted to perform or represented that he would perform. Respondent did not provide Chitgar, prior to entering into a fee agreement for loan modification or loan forbearance services, with the following written statement:
It is not necessary to pay a third party to arrange for a loan modification or other form of forbearance from your mortgage lender or servicer. You may call your lender directly to ask for a change in your loan terms. Nonprofit housing counseling agencies also offer these and other forms of borrower assistance free of charge. A list of nonprofit housing counseling agencies approved by the United States Department of Housing and Urban Development (HUD) is available from your local HUD office or by visiting www.hud.gov.
By negotiating, arranging and offering to perform a mortgage loan modification for a fee paid by Chitgar, and demanding, charging, collecting and receiving $1,000.00 from Chitgar prior to fully performing each and every service he had contracted to perform or represented that he would perform, in Violation Section 2944.7(a)(1) of the Civil Code, Respondent wilfully violated Business and Professions Code section 6106.3. By negotiating, arranging and offering to perform a mortgage loan modification for a fee paid by Chitgar in advance of any service and thereafter entering into a fee agreement with Chitgar without providing her, prior to entering into the agreement, the separate statement, in not less than 14-point bold type, specifically proscribed in Section 2944.6(a) of the Civil Code, Respondent wilfully violated Business and Professions Code section 6106.3.
Case No. 11-O-13942: Violation of California Civil Code § 2944.7(a) and 2944.6(a):
At all times herein relevant, Respondent owned and operated ALF. On or about November 17,
2010, Respondent accepted the representation of Kathleen and John Tatum (collectively "the Tatums"), residents of California, in order to negotiate and obtain for the Tatums a home mortgage loan modification for their residential property. On or about December 12, 2010, Respondent charged and collected $1,250.00 in advanced attorney fees from the Tatums before fully performing each and every service he had contracted to perform or represented that he would perform. On or about January 12, 2011, Respondent charged and collected $1,250.00 in advanced attorney fees from the Tatums before fully performing each and every service he had contracted to perform or represented that he would perform. Respondent did not provide the Tatums, prior to entering into a fee agreement for loan modification or loan forbearance services, with the following written statement:
It is not necessary to pay a third party to arrange for a loan modification or other form of forbearance from your mortgage lender or servicer. You may call your lender directly to ask for a change in your loan terms. Nonprofit housing counseling agencies also offer these and other forms of borrower assistance free of charge. A list of nonprofit housing counseling agencies approved by the United States Department of Housing and Urban Development (HUD) is available from your local HUD office or by visiting www.hud.gov.
By negotiating, arranging and offering to perform a mortgage loan modification for a fee paid by the Tatums, and demanding, charging, collecting and receiving $2,500.00 from the Tatums prior to fully performing each and every service he had contracted to perform or represented that he would perform, in violation Section 2944.7(a)(1) of the Civil Code, Respondent wilfully violated Business and Professions Code section 6106.3. By negotiating, arranging and offering to perform a mortgage loan modification for a fee paid by the Tatums in advance of any service and thereafter entering into a fee agreement with the Tatums without providing her, prior to entering into the agreement, the separate statement, in not less than 14point bold type, specifically proscribed in Section 2944.6(a) of the Civil Code, Respondent wilfully violated Business and Professions Code section 6106.3.
Case No. 11-O-14551: Failure to Account and Failure to Maintain Client Funds:
On or around November 2009, Theresa Cid ("Cid") hired Respondent to represent her in a personal injury accident resulting from an automobile accident she was involved in on or about November 16, 2009. Cid was informed that Respondent would take one third of any settlement and then pay Cid’s medical providers. On or about January 5, 2010, Respondent and Cid both signed a Doctor’s Lien which authorized Respondent to withhold the sums necessary to pay Cadman Chiropractic from any settlement funds. Cid’s treating chiropractor, Cadman Chiropractic, has a claim for $3,056.25. On or around November 2010, Respondent settled Cid’s claim for $7,000.00. On or about November 19, 2010, Respondent paid to Cid’s father, David Navarro Arredondo ("Arredondo"), $2,380.00. To date, Respondent has paid no part of the $3,056.25 owed to Cadman Chiropractic. Respondent has not provided Cid with an accounting of the funds he received on her behalf.
Respondent wilfully violated Rules of Professional Conduct, rule 4-100(B)(3), by failing to render appropriate accounts to a client regarding all funds coming into Respondent’s possession by failing to provide Cid with an accounting.
Respondent wilfully violated Rules of Professional Conduct, rule 4-100(A), by failing 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" or words of similar import by failing to maintain in his account enough of the settlement funds to pay Cadman Chiropractic.
Case No. 11-O-14636: Failure to Perform, Failure to Comply with a Court Order, and Failure to Release Client File:
On or about February 2010, Cesar Torres ("Torres") and his mother Gloria Lopez ("Lopez") hired Respondent to represent them in a personal injury action to be filed against Excellent Nutrition on a contingency basis. On or about August 10, 2010, Respondent filed a civil action on behalf of Torres and Lopez against Excellent Nutrition in Los Angeles Superior Court, Case No. BC443433. On or about October 21, 2010, a Case Management Conference was held where Respondent sent his paralegal, Carmen Pumo ("Phmo"), who requested a continuance. The Case Management Conference was rescheduled for December 3, 2010. On or about December 3, 2010, Respondent failed to appear at the Case Management Conference. The Case Management Conference is set again for December 8, 2010 along with an Order to Show Cause why Sanctions should not issue against Lopez, Torres and Respondent. Respondent fails to appear at the December 8, 2010 Case Management Conference and Order to Show Cause Hearing. On or about January 4, 2011, Torres’ and Lopez’s action is dismissed and sanctions are issued against Torres, Lopez and Respondent in the amount of $1,620.00. To date, Respondent has paid none of the $1,620.00. On or about February 24, 2011, Torres wrote to Respondent requesting the return of his and Lopez’s client file. Respondent received this letter. On or about April 29, 2011, Torres again wrote to Respondent requesting the return of his and Lopez’s client file. Respondent received this letter. On or about May 18, 2011, Torres went to Respondent’s office to attempt to retrieve his and Lopez’s client files, but was turned away by Respondent’s staff. On or about June 8, 2011, Torres again wrote to Respondent requesting his and Lopez’s client files. Respondent received this letter. To date, Torres’ and Lopez’s client file has not been returned to them.
Respondent wilfully violated Rules of Professional Conduct, rule 3-110(A), by intentionally, recklessly, or repeatedly failing to perform legal services with competence by failing to prosecute the civil action he filed on behalf of Lopez and Torres. Respondent wilfully violated Business and Professions Code, section 6103, by wilfully disobeying or violating an order of the court requiring him to do or forbear an act connected with or in the course of Respondent’s profession which he ought in good faith to do or forbear by failing to comply with the January 4, 2011 sanctions order. Respondent wilfully violated Rules of Professional Conduct, rule 3-700(D)(1), by failing to release promptly, upon termination of employment, to the client, at the request of the client, all the client papers and property.
Case No. 11-O-14752: Violation of California Civil Code § 2944.7(a):
At all times herein relevant, Respondent owned and operated ALF. On or about July 14, 2010, Respondent accepted the representation of Patrick and Jennie Rose (collectively "the Roses"), residents of California, in order to negotiate and obtain for the Roses a home mortgage loan modification for their residential property. On or around August 2010 and on or around September 2010, Respondent charged and collected a total of $3,500.00 in advanced attorney fees from the Roses before fully performing each and every service he had contracted to perform or represented that he would perform. By negotiating, arranging and offering to perform a mortgage loan modification for a fee paid by the Roses, and demanding, charging, collecting and receiving $3,500.00 from the Roses prior to fully performing each and every service he had contracted to perform or represented that he would perform, in violation Section 2944.7(a)(1) of the Civil Code, Respondent wilfully violated Business and Professions Code section 6106.3.
Case No. 11-O-14753" Unauthorized Practice of Law in Another Jurisdiction and Illegal Fee:
The laws of the State of Hawaii, including the Hawaii Rules of Professional Conduct, prohibit attorneys not licensed in Hawaii from practicing law in Hawaii subject to several limited exceptions. Respondent is not presently, and never has been, admitted to practice law in the state of Hawaii and Respondent was not otherwise entitled to practice law in the State of Hawaii during the time period addressed in this Notice of Disciplinary Charges. At all times herein relevant, Kalama Hiapo III ("Hiapo") resided in Hawaii. On or about August 28, 2009, Respondent accepted the representation of Hiapo, in order to negotiate and obtain for Hiapo a home mortgage loan modification for his Hawaii residential property.
On or about August 28, 2009, Respondent charged and collected $1,400.00 in advance attorney fees from Hiapo. Between on or around August 2009, and on or around May 2010, Respondent and agents acting on behalf of Respondent negotiated with Hiapo’s home loan mortgage lender regarding the modification of Hiapo’s home loan mortgage.
At no point did Respondent associate with an attorney licensed to practice in Hawaii on Hiapo’s home loan mortgage modification matter. By accepting representation of Hiapo as a client, collecting an advanced attorney fee and negotiating with Hiapo’s lender, Respondent willfully engaged in the unauthorized practice of law in violation of the regulations of the profession in Hawaii in witful violation of rule 1-300(B), Rules of Professional Conduct.
By accepting representation of Hiapo and charging and collecting fees from Hiapo, when he was not licensed to practice law in Hawaii, Respondent willfully entered into an agreement for, charged, and collected an illegal fee from Hiapo in wilful violation of rule 4-200(A), Rules of Professional Conduct.
Case No. 11-O-15203: Violation of California Civil Code § 2944.7(a):
At all times herein relevant, Respondent owned and operated ALF. On or about November 17, 2010, Respondent accepted the representation of Soraya Nauroz ("Nauroz"), a resident of California, in order to negotiate and obtain for Nauroz a home mortgage loan modification for her residential property. On or about April 26, 2010, Respondent charged and collected $2,000.00 in advanced attorney fees from Nauroz before fully performing each and every service he had contracted to perform or represented that he would perform. On or about June 21, 2010, Respondent charged and collected $1,995.00 in advanced attorney fees from Nauroz before fully performing each and every service he had contracted to perform or represented that he would perform.
By negotiating, arranging and offering to perform a mortgage loan modification for a fee paid by Nauroz, and demanding, charging, collecting and receiving $3,995.00 from Nauroz prior to fully performing each and every service he had contracted to perform or represented that he would perform, in violation Section 2944.7(a)(1) of the Civil Code, Respondent wilfully violated Business and Progessions Code section 6106.3.
Case No. 11-O-15403: Unauthorized Practice of Law in Another Jurisdiction, Illegal Fee and Violation of California Civil Code § 2944.7(a):
The laws of the State of Maryland, including the Maryland Rules of Professional Conduct,
prohibit attorneys not licensed in Maryland from practicing law in Maryland subject to several limited exceptions. Respondent is not presently, and never has been, admitted to practice law in the state of Maryland and Respondent was not otherwise entitled to practice law in the State of Maryland during the time period addressed in this Notice of Disciplinary Charges.
At all times herein relevant, Ronald Jones ("Jones") resided in Maryland. On or around July
2010, Respondent accepted the representation of Jones, in order to negotiate and obtain for Jones home mortgage loan modifications for two of his Maryland property. On or about July 26, 2010, Respondent charged and collected $2,000.00 in advance attorney fees from Jones. On or about August 26, 2010, Respondent charged and collected $2,000.00 in advance attorney fees from Jones. Between on or around July 2010, and on or around July 2011, Respondent and agents acting on behalf of Respondent negotiated with Jones’ home loan mortgage lender regarding the modifications of Jones’ home loan mortgages. At no point did Respondent associate with an attorney licensed to practice in Maryland on Jones’ home loan mortgage modification matter.
By accepting representation of Jones as a client, collecting an advanced attorney fee and negotiating with Jones’ lender, Respondent willfully engaged in the unauthorized practice of law in violation of the regulations of the profession in Maryland in wilful violation of rule 1-300(B), Rules of Professional Conduct. By accepting representation of Jones and charging and collecting fees from Jones, when he was not licensed to practice law in Maryland, Respondent willfully entered into an agreement for, charged, and collected an illegal fee from Jones in wilful violation of rule 4-200(A), Rules of Professional Conduct.
By negotiating, arranging and offering to perform a mortgage loan modification for a fee paid by Jones, and demanding, charging, collecting and receiving $4,000.00 from Jones prior to fully performing each and every service he had contracted to perform or represented that he would perform, in violation Section 2944.7(a)(1) of the Civil Code, Respondent wilfully violated Business and Professions Code section 6106.3.
PENDING PROCEEDINGS.
The disclosure date referred to, on page 2, paragraph A(7), was October 25,2011.
AUTHORITIES SUPPORTING DISCIPLINE.
Standard 1.3, Title IV, Standards for Attorney Sanctions for Professional Misconduct, provides that, the primary purposes of the disciplinary system 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." Standard 2.2(b) holds that a violation of rule 4-100 that does not result in the wilful misappropriation of client funds shall result in a three month actual suspension, irrespective of mitigating circumstances.
Standard 2.4(b) holds that a failure to perform in individual client matters, not demonstrating a pattem, shall result in reproval or suspension depending on the extent of the misconduct and the extent of harm to the client. Standard 2.6 holds that a violation of §§ 6068 and 6103, Business and Professions Code, shall result in disbarment or suspension depending on the gravity of the offense or harm, if any, to the victim. Standard 2.10 holds that the violation of rule 1-300(B), Rules of Professional Conduct [Unauthorized Practice of Law in Another Jurisdiction], rule 3-700(D)(1) [Failure to Return Client File], rule 3-700(D)(2) [Failure to Refund Unearned Fees], rule 4-200(A) [Illegal Fee], § 6090.5 [Seeking an Agreement to Withdraw a State Bar Complaint], and § 6106.3 [Violation of California Civil Code § 2944.7(a) and 2944.6(a)] shall result in reproval or suspension, depending on the gravity of the offense or the harm to the victim. The Standards call for a level of discipline ranging between three months actual suspension and disbarment. Based on the facts of this case, a two year suspension with 18 months of actual suspension and three years of probation is an appropriate level of discipline.
Respondent’s misconduct consists of three failures to perform (rule 3-110(A)), two failures to obey a court order (§6103), one count of seeking to make an agreement to withdraw a State Bar complaint (§6090.5(a)), one failure to return unearned fees (rule 3-700(D)(2)), one failure to account (rule 4-100(B)(3)), one failure to maintain client funds (rule 4-100(A)), one failure to release a client file (rule 3-700(D)(1)), fourteen violations of SB 94 (§6106.3) and seven counts of the unauthorized practice of law/accepting an illegal fee (rules 1-300(B) and 4-200(A)).
As an initial matter, it is important to note that although Respondent’s misconduct involves the collection of illegal fees, Respondent was not charging unconscionable fees. Respondent had a mistaken but good faith belief that he could represent out-of-state clients in loan modification matters if the representation was solely negotiating with the client’s lender.
Respondent’s SB 94 violations involved Respondent breaking his loan modification services into phases and charging clients fees after a specific phase of work was complete. Although Respondent acknowledges that this conduct constitutes a technical violation of SB 94, Respondent did not intend to charge upfront fees in an effort to avoid performing after collecting fees. Although there are no cases with a substantially similar fact pattern, caselaw supports a two year suspension with 18 months of actual suspension and three years of probation.
In In the Matter of Wells (Review Dept. 2005) 2005 WL 3293313, the Review Department recommended that the respondent be suspended for two years, stayed, with six months of actual suspension. In Wells, the respondent was found to have engaged in the unauthorized practice of law in South Carolina on two occasions. The respondent was also found to have held herself out as entitled to practice in South Carolina when she was not. The respondent charged not only illegal fees, but her fees were found to be excessive and unconscionable. The respondent was found culpable of moral turpitude by lying to both the State Bar and the South Carolina Solicitor’s Office during the course of the investigation of her conduct. In aggravation, the respondent had a prior record of discipline, was found to have engaged in multiple acts of wrongdoing, was found to have harmed the public the administration of justice and her clients, and the respondent demonstrated indifference to the consequences of her misconduct.
Although Respondent here has engaged in more instances of the unauthorized practice of law, Respondent was acting in good faith, whereas the Wells court found that the respondent there was not acting in good faith. Respondent has not engaged in any conduct involving moral turpitude. Respondent here did not charge excessive and unconscionable fees and has agreed to fully refund each out-of-town client prior to the filing of any formal charges. Respondent has cooperated with the State Bar during this investigation.
In In the Matter of Harney (Review Dept. 1995) 3 Cal. State Bar Ct. Rptr. 266, the Review Department placed the respondent on a six month actual suspension for concealing the statutory fee limit under the Medical Injury Compensation Reform Act ("MICRA") from both the court and his client. The respondent collected a fee that was $266,850 in excess of the MICRA limit. The respondent was found culpable of a number of other violations, including conduct involving moral turpitude. The Harney court, like the Wells court, acknowledged that illegal fee cases do not necessarily warrant the same discipline as an unconscionable fee matter. In this case, Respondent’s violations of SB 94 do not warrant the more serious discipline that unconscionable fees do.
Respondent’s misconduct is surrounded by some aggravating circumstances, specifically that his misconduct evidences multiple acts of wrongdoing. However, the UPL violations occurred within an approximately one year period when Respondent mistakenly, but in good faith, believed that he was not engaging in the unauthorized practice of law.
All of Respondent’s misconduct unrelated to his loan modification practice, such as his failure to perform, failure to return unearned, fees, and failure to obey a court order, occurred around April 2010. Although not an excuse, the mother of Respondent’s child was in and out of the hospital and Respondent acknowledges that he let his duties to his clients and the courts lapse. Respondent chose to take responsibility for his misconduct by agreeing to discipline prior to the filing of formal charges.
COSTS OF DISCIPLINARY PROCEEDINGS.
Respondent acknowledges that the Office of the Chief Trial Counsel has informed respondent that as of October 25, 2011, the prosecution costs in this matter are $17,961.00. 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.
(Do not write above this line.)
In the Matter of: NICHOLAS O. HEDDING
Case Number(s):
10-O-05022; 10-O-08267; 10-O-10594; 10-O10596; 10-O-10996; 10-O-11200; 11-O-10408; 110-12668; 11-O-12674; 11-O-13348; 11-O-13942; 11-O-14551; 11-O-14636; 11-O-14752; 11-O14753; 11-O-15203; 11-O-15403
Financial Conditions
a. Restitution
[] Respondent must pay restitution (including the pnncipal 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.
Payee; Rodolfo and Martha Anaya, Principal Amount; $1,200.00, Interest Accrues From; February 19, 2010
Payee; Teresa Murphy, Principal Amount; $2,495.00, Interest Accrues From; April 6, 2010
Payee; Robyn Davidoff, Principal Amount; $3,695.00, Interest Accrues From; November 23, 2009
Payee; Bobby and Barbara, Principal Amount; Martin $2,495.00, Interest Accrues From; October 10, 2009
[] Respondent must pay above-referenced restitution and provide satisfactory proof of payment to the Office of Probation not later than the expiration of his probationary period.
b. Installment Restitution Payments
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.
Payee CSF (as applicable) Minimum Payment Amount Payment Frequency
[ ] 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.
c. Client Funds Certificate 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:
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";
In the Matter of: NICHOLAS O. HEDDING
Case Number(s): 10-O-05022; 10-O-08267; 10-O-10594; 10-O-10596; 10-O-10996; 10-O-11200; 11-O-10408; 11-O-12668; 11-O-12674; 11-O-13348; 11-O-13942; 11-O-14551; 11-O-14636; 11-O-14752; 11-O-14753; 11-O-15203; 11-O-15403
Financial Conditions
a. Restitution 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.
Payee; Sayed Shah, Principal Amount $3,459.00, Interest Accrues From: May 10, 2010
Payee; Toshihiro Endo, Principal Amount $2,400.00, Interest Accrues From; May12, 2009
Payee; Mary Swaidner, Principal Amount $1,662.00, Interest Accrues From; December 31, 2009
Payee; Reza Chitgar, Principal Amount $1,000.00, Interest Accrues From; March 22, 2010
[] Respondent must pay above-referenced restitution and provide satisfactory proof of payment to the Office of Probation not later than the expiration of his probationary period.
b. Installment Restitution Payments 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.
Payeel/CSF (as applicable) Minimum Payment Amount Payment Frequency
[ ] 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.
c. Client Funds Certificate
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:
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";
(Effective January 1,2011) Financial Conditions
In the Matter of: NICHOLAS O. HEDDING
Case Number(s): 10-O-05022; 10-O-08267; 10-O-10594; 10-O10596; 10-O-10996; 10-O-11200; 11-O-10408; 11-O-12668; 11-O-12674; 11-O-13348; 11-O-13942; 11-O-14551; 11-O-14636; 11-O-14752; 11-O14753; 11-O-15203; 11-O-15403
Financial Conditions
a. Restitution
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.
Payee; Patrick and Jennie Rose, Principal Amount; $3,500.00, Interest Accrues From; August 31, 2010
Payee; Mun and Erika Song, Principal Amount; $2,000.00, Interest Accrues From; April 13, 2010
Payee; Gnouni Gegamyan, Principal Amount; $1,399.00; Interest Accrues From; April 9, 2010 Payee; Cadman Chiropractic, Principal Amount; $3,056.25, Interest Accrues From; November 31, 2010
[] Respondent must pay above-referenced restitution and provide satisfactory proof of payment to the Office of Probation not later than the expiration of his probationary period.
b. Installment Restitution Payments 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.
Payeel/CSF (as applicable) Minimum Payment Amount Payment Frequency
[] 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.
c. Client Funds Certificate 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:
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";
(Effective January 1, 2011), Financial Conditions
In the Matter of: NICHOLAS O. HEDDING
Case Number(s): 10-O-05022; 10-O-08267; 10-O-10594; 10-O-10596; 10-O-10996; 10-O-11200; 11-O-10408; 11-O-12668; 11-O-12674; 11-O-13348; 11-O-13942; 11-O-14551; 11-O-14636; 11-O-14752; 11-O-14753; 11-O-15203; 11-O-15403
Financial Conditions
a. Restitution 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.
Payee; The Los Angeles County Superior Court, Principal Amount; $1,620.00, Interest Accrues From; January 4, 2011
Payee; John and Kathleen Tatum, Principal Amount; $2,500.00 Interest Accrues From; December 12, 2010
Payee; Soraya Nauroz, Principal Amount; $3,995.00 Interest Accrues From; April 26, 2010
Payee; Kalama Hiapo III, Principal Amount; $1,400.00 Interest Accrues From; August 28, 2009
[] Respondent must pay above-referenced restitution and provide satisfactory proof of payment to the Office of Probation not later than the expiration of his probationary period.
b. Installment Restitution Payments
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.
Payee/CSF (as applicable) Minimum Payment Amount Payment Frequency
[] 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.
c. Client Funds Certificate
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:
(Effective January 1, 2011) Financial Conditions
In the Matter of: NICHOLAS O. HEDDING
Case Number(s): 10-O-05022; 10-O-08267; 10-O-10594; 10-O-10596; 10-O-10996; 10-O-11200; 11-O-10408; 11-O-12668; 11-O-12674; 11-O-13348; 11-O-13942; 11-O-14551; 11-O-14636; 11-O-14752; 11-O-14753; 11-O-15203; 11-O-15403
Financial Conditions
a. Restitution
[] 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.
Payee; Ronald Jones, Principal Amount; $4,000.00, Interest Accrues From; July 26, 2010
Respondent must pay above-referenced restitution and provide satisfactory proof of payment to the Office of Probation not later than the expiration of his probationary period.
b. Installment Restitution Payments 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.
Payeel/CSF (as applicable) Minimum Payment Amount Payment Frequency
[] 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.
c. Client Funds Certificate
[] 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:
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";
(Effective January 1,2011 )
Financial Conditions
b. Respondent has kept and maintained the following:
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, 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. 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. d. Client Trust Accounting School 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.
(Effective January 1, 2011)
Financial Conditions
Case Number(s): Nicholas O. Hedding
In the Matter of: 10-O-05022; 10-O-08267, 10-O-10594, 10-O-10596, 10-O-10996, 10-O-11200, 11-O-10408, 11-O-12668, 11-O-12674, 11-O-13348, 11-O-13942, 11-O-14551, 11-O-14636, 11-O-14752, 11-O-14753, 11-O-15203, 11-O-15403
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: Nicholas O. Hedding
Date: 11/2/11
Respondent’s Counsel: Paul J. Virgo
Date: 11/2/2011
Deputy Trial Counsel: Jessica A. Lienau
Date: 11/7/2011
Case Number(s): 10-O-05022; 10-O-08267;10-O-10594; 10-O-10596; 10-O-10996; 10-O-11200; 11-O-10408; 11-O-12668; 11-O-12674; 11-O-13348; 11-O-13942; 11-O-14551; 11-O-14636; 11-O-14752; 11-O-14753, 11-O-15203; 11-O-15403
In the Matter of: Nicholas O. Hedding
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 AS MODIFIED as set forth below, and the DISCIPLINE IS RECOMMENDED to the Supreme Court.
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: Donald F. Miles
Date: 11/10/11
(Effective January 1, 2011)
Actual Suspension Order
[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 November 14, 2011, I deposited a true copy of the following document(s):
STIPULATION RE FACTS, CONCLUSIONS OF LAW AND DISPOSITION AND ORDER APPROVING ACTUAL SUSPENSION
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:
PAUL JEAN VIRGO
9909 TOPANGO BLVD #282
CHATSWORTH, CA 91311
checked. by interoffice mail through a facility regularly maintained by the State Bar of California addressed as follows:
JESSICAN LIENAU, Enforcement, Los Angeles
I hereby certify that the foregoing is true and correct. Executed in Los Angeles, California on November 14, 2011.
Signed by:
Tammy Cleaver
Case Administrator
State Bar Court