Case Number(s): 10-O-09495
In the Matter of: David K. Arase, Bar #233705, A Member of the State Bar of California, (Respondent).
Counsel For The State Bar: Kimberly G. Anderson, The State Bar of California
1149 S. Hill St.
Los Angeles, CA 90015
(213) 765-1083
Bar #150359
Counsel for Respondent: In Pro Per Respondent
David Arase
Bar # 233705
Submitted to: Settlement Judge
Filed: April 12, 2011 State Bar Court Clerk’s Office Los Angeles.
<<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 1, 2004.
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):
checked. Costs are added to membership fee for calendar year following effective date of discipline.
<<not>> checked. Costs are to be paid in equal amounts prior to February 1 for the following membership years: . (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.
checked. (c) Rules of Professional Conduct/ State Bar Act violations: Rules ]-300(t3), ]-310, ]- 320(A), 3700(D)(2), and 4-200(A). Business and Professions Code, section 6068(i).
<<not>> checked. No MPRE recommended. Reason: Respondent is ordered to take and pass the MPRE in State Bar Court Case No. 09-0-12160 et al. The Supreme Court has recently signed the discipline order in that case, which will become effective on March 31, 2011. Therefore, the protection of the public does not require Respondent to take and pass the MPRE in this case. (See, Rule 956, California Rules of Court and In
the Matter of Respondent G (Review Dept. 1992) 2 Cal. State Bar Ct. Rptr. 181.
Case Number(s): 10-O-09495
In the Matter of: David K. Arase
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.
1. Payee: Geoff Iverson
Principal Amount: $6,400.00
Interest Accrues From: March 31, 2010
2. Payee:
Principal Amount:
Interest Accrues From:
3. Payee:
Principal Amount:
Interest Accrues From:
4. Payee:
Principal Amount:
Interest Accrues From:
<<not>> checked. Respondent must pay above-referenced restitution and provide satisfactory proof of payment to the Office of Probation not later than .
<<not>> checked. Respondent must pay the above-referenced restitution on the payment schedule set forth below. Respondent must provide satisfactory proof of payment to the Office of Probation with each quarterly probation report, or as otherwise directed by the Office of Probation. No later than 30 days prior to the expiration of the period of probation (or period of reproval), Respondent must make any necessary final payment(s) in order to complete the payment of restitution, including interest, in full.
1. Payee/CSF (as applicable)
Minimum Payment Amount
Payment Frequency
2. Payee/CSF (as applicable)
Minimum Payment Amount
Payment Frequency
3. Payee/CSF (as applicable)
Minimum Payment Amount
Payment Frequency
4. Payee/CSF (as applicable)
Minimum Payment Amount
Payment Frequency
<<not>> checked. 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.
1. If Respondent possesses client funds at any time during the period covered by a required quarterly report, Respondent must file with each required report a certificate from Respondent and/or a certified public accountant or other financial professional approved by the Office of Probation, certifying that:
a. Respondent has maintained a bank account in a bank authorized to do business in the State of California, at a branch located within the State of California, and that such account is designated as a “Trust Account” or “Clients’ Funds Account”;
b. Respondent has kept and maintained the following:
i. A written ledger for each client on whose behalf funds are held that sets forth:
1. the name of such client;
2. the date, amount and source of all funds received on behalf of such client;
3. the date, amount, payee and purpose of each disbursement made on behalf of such client; and,
4. the current balance for such client.
ii. a written journal for each client trust fund account that sets forth:
1. the name of such account;
2. the date, amount and client affected by each debit and credit; and,
3. the current balance in such account.
iii. all bank statements and cancelled checks for each client trust account; and,
iv. each monthly reconciliation (balancing) of (i), (ii), and (iii), above, and if there are any differences between the monthly total balances reflected in (i), (ii), and (iii), above, the reasons for the differences.
c. Respondent has maintained a written journal of securities or other properties held for clients that specifies:
i. each item of security and property held;
ii. the person on whose behalf the security or property is held;
iii. the date of receipt of the security or property;
iv. the date of distribution of the security or property; and,
v. the person to whom the security or property was distributed.
2. If Respondent does not possess any client funds, property or securities during the entire period covered by a report, Respondent must so state under penalty of perjury in the report filed with the Office of Probation for that reporting period. In this circumstance, Respondent need not file the accountant’s certificate described above.
3. The requirements of this condition are in addition to those set forth in rule 4-100, Rules of Professional Conduct.
<<not>> checked. Within one (1) year of the effective date of the discipline herein, Respondent must supply to the Office of Probation satisfactory proof of attendance at a session of the Ethics School Client Trust Accounting School, within the same period of time, and passage of the test given at the end of that session.
IN THE MATTER OF: David Arase
CASE NUMBER(S): 10-O-09495
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- 19495 (Complainant: Geoff Iverson)
FACTS:
1. On November 8, 2008, Geoff Iverson ("Iverson"), a California resident, employed
Respondent to represent him in order to negotiate with their home mortgage lender and obtain a modification of the Iverson’s home mortgage loan. That same date, Iverson signed an agreement for legal services with Respondent and paid him an advanced fee in the sum of $6,400.00.
2. The agreement for legal services that Iverson signed with Respondent included a clause which provided that if Respondent was unable to negotiate a plan on Iverson’s behalf with his lender,
Respondent would refund the advanced fee to Iverson.
3. Respondent did not earn any of the advanced fees paid by Iverson because he did not obtain a mortgage relief plan acceptable to Iverson.
4. In March 2010, Iverson telephoned Respondent’s office and demanded a refund. To date,
Respondent has not refunded any portion of the $6,400.00 to Iverson.
CONCLUSIONS OF LAW:
5. By failing to refund to the unearned advanced fee to Iverson between March 2010 and the present, Respondent willfully failed to promptly refund unearned fees in violation of Rule 3-700(D)(2) of the Rules of Professional Conduct.
MITIGATION.
Candor and Cooperation:
Respondent has been candid and cooperative in this case as evidenced by his entering into this stipulation to resolve this matter early on and before any disciplinary charges had to be filed and as evidenced by his admission of the misconduct.
ADDITIONAL MITIGATING CIRCUMSTANCES.
Respondent had been practicing law less than four years at the time the misconduct began. (See, Lawhorn v. State Bar (1987) 43 Cal.3d 1357, 1666 recognizing attorney’s relative inexperience at the time of the offense, coupled with other mitigation warranted consideration.)
Respondent closed his loan modification practice and did not accept any new loan modification cases after June 27, 2009, although he did continue to try to assist some, clients with their matters until August 4, 2010.
PENDING PROCEEDINGS.
The disclosure date referred to, on page 2, paragraph A(7), was March 2, 201 I.
COSTS OF DISCIPLINARY PROCEEDINGS.
Respondent acknowledges that the Office of the Chief Trial Counsel has informed respondent that as of March 2, 2011, the prosecution costs in this matter are approximately $2,797.00. 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.
AUTHORITIES SUPPORTING DISCIPLINE.
Respondent received a two year actual suspension, three years’ probation and three years’ stayed suspension in his prior discipline case, Case No. 09-0-12160 et. al. This discipline was based upon In the Matter of Jones (Review Dept. 1993) 2 Cal. State Bar Ct. Rptr. 411 (attorney was given a two-year actual suspension, three years’ probation and three years’ stayed suspension after being found culpable at trial of misconduct arising from the abdication of responsibility over his personal injury law practice
for a period of two years to a non-attorney). See also, Standards 1.2, 1.3, 1.6, 2.6, 2.7 and 2.10 of the Standards for Attorney Sanctions for Professional Misconduct.
The instant matter is a single case of misconduct involving a single violation of Rule 3-700(D)(2) arising out of the same course of conduct in Case No. 09-0-12160 et. al. If this case had been settled in connection with the prior disciplinary matter, it would not have warranted any additional actual suspension. (See, In the Matter of Sklar (Review Dept. 1993) 2 Cal. State Bar Ct. Rptr. 602.)
Case Number(s): 10-O-09495
In the Matter of: David K. Arase
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.
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: Richard A. Honn
Date: April 12, 2011
Case Number(s): 10-O-09495
In the Matter of: David K. Arase
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: David K. Arase
Date: March 18, 2011
Respondent’s Counsel:
Date:
Deputy Trial Counsel: Kimberly G. Anderson
Date: March 21, 2011
[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 April 12, 2011, I deposited a true copy of the following document(s):
STIPULATION RE FACTS, CONCLUSIONS OF LAW AND
DISPOSITION AND ORDER APPROVING
in a sealed envelope for collection and mailing on that date as follows:
checked. by first-class mail, with postage thereon fully prepaid, through the United States Postal Service at Los Angeles, California, addressed as follows:
DAVID K ARASE ESQ
3857 BIRCH ST #566
NEWPORT BEACH, CA 92660
checked. by interoffice mail through a facility regularly maintained by the State Bar of California addressed as follows:
Kimberly G. Anderson, Enforcement, Los Angeles
I hereby certify that the foregoing is true and correct. Executed in Los Angeles, California, on April 12, 2011.
Signed by:
Julieta E. Gonzales
Case Administrator
State Bar Court