Case Number(s): 11-O-10763
In the Matter of: Loyd Lee Brown Bar # 195240 A Member of the State Bar of California, (Respondent).
Counsel For The State Bar: Susan I. Kagan
Deputy Trial Counsel
180 Howard Street
San Francisco, CA 94105
(415) 538-2037
Bar # 214209
Counsel for Respondent: In Pro Per Respondent
Loyd Lee Brown, Jr.
P.O. Box 2296
Kings Beach, CA 96143
(530) 546-3122
Bar # 195240
Submitted to: Assigned Judge, State Bar Court Clerk’s Office San Francisco
Filed: November 7, 2011
<<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. June 1, 1998
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 12 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: The two years following the effective date of the disciplinary order issuing as the result of this stipulation. (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.
Attachment language (if any):
IN THE MATTER OF: Loyd Lee Brown, Jr, State Bar No. 195240
STATE BAR COURT CASE NUMBER: 11-O-10763
Facts
1. At all relevant times herein, "US Loan Auditors, LLC", "US Loan Auditors, Inc." and "My US Legal Services" (hereinafter "My US Legal") were companies owned, in part, by non-attomeys. At all relevant times herein, homeowners hired My US Legal to file predatory lender lawsuits and paid advanced attorney’s fees in monthly installments to My US Legal. Thereafter, My US Legal hired outside attorneys ("contract attorneys") to handle the predatory lender lawsuits. My US Legal paid the contract attorney $250.00 per month per client as attorney’s fees. The $250.00 was paid from the monthly installments paid to My US Legal by the homeowners as advanced attorney’s fees.
2. From April to June 2010, My US. Legal hired respondent to handle predatory lender lawsuits on behalf of its clients. From April through June 2010, My US Legal paid respondent a total of $14,750.00 as fees from a portion of the monthly installments paid to My US Legal by the homeowners as advanced attorney’s fees. The $14,750.00 represented an impermissible fee split with a non-attorney.
3. Prior to April 2010, Frank and Laura Pariani ("the Parianis") hired My US Legal to file a predatory lender lawsuit on their behalf. In April 2010, My US Legal hired respondent to handle the Parianis matter. At all relevant times herein, the Parianis paid My US Legal advanced attorney’s fees in monthly installments. My US Legal forwarded $750.00 (paid in installments of $250.00 per month) to respondent for the Parianis matter. The $250.00 represented attorney’s fees and was paid from a portion of the advanced attorney’s fees paid by the Parianis to My US Legal. The $750.00 represented an impermissible fee split with a non-attorney.
4. Thereafter, My US Legal filed a complaint on behalf of the Parianis. Thereafter, respondent failed to perform any work of value in the Parianis matter. Respondent did not earn the $750.00 paid as advanced fees.
Conclusions of Law
1. By splitting the legal fees with My US Legal, respondent shared a legal fee with a person who is not a
lawyer in willful violation of rule 1-320(A) of the Rules of Professional Conduct.
2. By failing to perform any work of value in the Parianis matter, respondent intentionally, recklessly, or repeatedly failed to perform legal services with competence in willful violation of rule 3-110(A) of the
Rules of Professional Conduct.
3. By failing to refund $750.00 in unearned fees to the Parianis, respondent failed to refund promptly any part of a fee paid in advance that has not been earned in willful violation of rule 3-700(D)(2) of the Rules of Professional Conduct.
(
Effective January 1,2011)
.
PENDING PROCEEDINGS
The disclosure date referred to, on page 2, paragraph A(7), was October 7, 2011.
.COSTS OF DISCIPLINARY PROCEEDINGS
Respondent acknowledges that the State Bar has informed respondent that as of October 7, 2011, the estimated prosecution costs in this matter are approximately $2,797.00. Respondent acknowledges that this figure is an estimate only and that it does not include State Bar Court costs which will be included in any final cost assessment. Respondent further acknowledges that should this stipulation be rejected or should relief from the stipulation be granted, the costs in this matter may increase due to the cost of further proceedings.
FACTS SUPPORTING AGGRAVATING AND MITIGATING CIRCUMSTANCES
AGGRAVATING CIRCUMSTANCES
Standard 1.2(b)(iv). Respondent’s misconduct caused significant harm to his clients.
MITIGATING CIRCUMSTANCES
Standard 1.2(e)(i). Respondent has been practicing law since 1998, and has no prior record of discipline.
Standard 1.2(e)(v). Respondent displayed spontaneous candor and cooperation to the State Bar during the disciplinary proceedings.
Standard 1.2(e)(vii). Respondent displayed remorse for his misconduct.
SUPPORTING AUTHORITY
Standard 2.4(b) requires reproval or suspension for a respondent who has wilfully failed to perform services in which he was retained.
Standard 2.10 requires that a violation of any provision of the Rules of Professional Conduct not specified in the standards (e.g., rules 1-320(A) and 3-700(D)(2)) shall result in reproval or suspension according to the gravity of the offense or harm, if any, to the victim, with due regard to the purpose of imposing discipline set forth in standard 1.3.
Generally, fee splitting with a non-attoney results in a period of actual suspension. (See, e.g., In the Matter
of Bragg (Review Dept. 1997) 3 Cal. State Bar Ct. Rptr. 615; In re Arnoff (1978) 22 Cal.3d 125; In the Matter of Jones (Review Dept. 1993) 2 Cal. State Bar Ct. Rptr. 411; In the Matter of Scapa and Brown (Review Dept. 1993) 2 Cal. State Bar Ct. Rptr. 635; In the Matter of Nelson (Review Dept. 1991) 1 Cal. State Bar Ct. Rptr. 178].) However, based on the length of respondent’s discipline-free practice and the fact that he is making restitution to the victims of his misconduct, a stayed suspension is the appropriate level of discipline in this matter.
Case Number(s): 110-010763
In the Matter of: Loyd Lee Brown, Jr.
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: Frank and Laura Pariani
Principal Amount: $750.00
Interest Accrues From: N/A
2. Payee: Susan K. Smith, Trustee for Estate of My US Legal Services, Inc., U.S.
Bankruptcy Court, Eastern District, Sacramento Division, Case No. 10-51750
Principal Amount: 14,000.00
Interest Accrues From: N/A
3. Payee:
Principal Amount:
Interest Accrues From:
4. Payee:
Principal Amount:
Interest Accrues From:
checked. Respondent must pay above-referenced restitution and provide satisfactory proof of payment to the Office of Probation not later than twenty-two (22) months from the effective date of discipline..
<<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.
Case Number(s): 11-O-10763
In the Matter of: Loyd Lee Brown, Jr
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: Loyd Lee Brown, Jr., Susan I. Kagan
Respondent: Loyd Lee Brown, Jr
Date: 10/14/2011
Respondent’s Counsel: N/A
Date:
Deputy Trial Counsel: Susan I. Kagan
Date: 10/24/2011
Case Number(s): 11-O-10763
In the Matter of: Loyd Lee Brown, Jr
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: Pat McElroy
Judge of the State Bar Court: Pat McElry
Date: November 7, 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 San Francisco, on November 7, 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 San Francisco, California, addressed as follows:
LOYD L. BROWN JR.
PO BOX 2296
KINGS BEACH, CA 96143
<<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:
Susan Kagan, Enforcement, San Francisco
I hereby certify that the foregoing is true and correct. Executed in San Francisco, California, on November 7, 2011.
Signed by: George Hue
Case Administrator
State Bar Court