Case Number(s): 12-O-14892
In the Matter of: Annette L. Goudy, Bar # 152608, A Member of the State Bar of California, (Respondent).
Counsel For The State Bar: Nada M. Alnajafi, Deputy Trial Counsel
1149 S. Hill Street
Los Angeles, CA 90015
(213)765-1336
Bar # 267621
Counsel for Respondent: Arthur L. Margolis, Margolis & Margolis LLP
2000 Riverside Drive
Los Angeles, CA 90039
(323)953-8996
Bar # 57703
Submitted to: Settlement Judge – State Bar Court Clerk’s Office Los Angeles.
Filed: January 14, 2013.
<<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 6, 1991.
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: . (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: Annette Lynn Goudy, State Bar No. 152608
STATE BAR COURT CASE NUMBER: 12-O-14892
FACTS AND CONCLUSIONS OF LAW.
Respondent admits that the following facts are true and that she is culpable of violations of the specified statutes and/or Rules of Professional Conduct.
Case No. 12-O-14892 (Complainant: Anna Hernandez)
FACTS:
1. In early June of 2008, Anna Hernandez ("Hernandez") hired Respondent to file a temporary conservatorship application and a permanent conservatorship application to obtain conservatorship of Hernandez’s elderly and ill mother, Mary Lou Hernandez ("Hernandez’s mother").
2. On June 5, 2008, Hernandez paid Respondent $5,000 as advanced attorney’s fees.
3. On June 25, 2008, Hernandez’s mother passed away. One week later, Hernandez terminated Respondent’s employment by telephone and requested that Respondent provide her with a refund of unearned fees and an accounting.
4. During Respondent’s employment as Hernandez’s attorney, Respondent did not file any conservatorship applications on behalf of Hernandez. Respondent did not earn any portion of the $5,000 fees advanced by Hernandez.
5. In June 2012, having received no refund of any amount from Respondent, Hernandez filed a case in small claims court against Respondent seeking a money judgment for the return of the $5,000 advanced fees.
6. In June 2012, Hernandez submitted a complaint about Respondent to the State Bar.
7. Respondent provided a refund of the $5,000 in unearned fees to Hernandez in October 2012, more than four years after her employment terminated.
8. Respondent had an affirmative duty to provide Hernandez with an accounting. Respondent did not meet that duty, as she has not provided Hernandez with an accounting, to date.
CONCLUSIONS OF LAW:
9. By not refunding to Hernandez any part of the $5,000 unearned fees until over four years after Respondent’s employment terminated, and not until after Hernandez filed a small claims case and submitted a State Bar complaint, Respondent failed to refund promptly any part of a fee paid in advance that has not been earned in willful violation of Rules of Professional Conduct, rule 3-700(13)(2).
10. By failing to provide Hernandez with an accounting of the fees advanced to Respondent by Hernandez, Respondent failed to render appropriate accounts to Hernandez regarding all funds coming into Respondent’s possession in willful violation of Rules of Professional Conduct, rule 4-100(B)(3).
ADDITIONAL FACTS RE AGGRAVATING CIRCUMSTANCES.
Multiple Acts of Wrongdoing: Respondent’s current misconduct evidences multiple acts of wrongdoing as described above, which have resulted in two distinct violations of the Rules of Professional Conduct and constitute an aggravating circumstance. (See Standard 1.2(b)(ii); In the Matter of Valinoti (Review Dept. 2002) 4 Cal. State Bar Ct. Rptr. 498, 555.)
Harm: Respondent received $5,000 in advanced fees from Hernandez. Thereafter, Respondent did not file any conservatorship applications on behalf of Hernandez and did not provide a refund to Hernandez for four (4) years. Additionally, Hernandez was forced to file a small claims lawsuit and a State Bar complaint before Respondent provided the refund. Respondent’s misconduct caused significant harm to her client, which constitutes an aggravating circumstance. (See Standard 1.2(b)(iv); In the Matter of Bouyer (Review Dept. 1991) I Cal. State Bar Ct. Rptr. 404, 417.)
ADDITIONAL FACTS RE MITIGATING CIRCUMSTANCES.
No Prior Record of Discipline: Although Respondent’s current misconduct is serious, at the time of the misconduct, Respondent had more than seventeen (17) years of practice without discipline, which is entitled to significant mitigation. (See In the Matter of Riordan (Review Dept. 2007) 5 Cal. State Bar Ct. Rptr. 41, 49 [attorney with seventeen years of discipline-free practice entitled to mitigation despite serious misconduct].)
Cooperation with State Bar: Additionally, Respondent has cooperated with the State Bar by entering into a stipulated settlement for the matter described herein at an early stage without the need of a trial to resolve this matter. (Silva-Vidor v. State Bar (1989) 49 Ca.3d 1071, 1079 [mitigative credit given where attorney admitted facts and culpability in order to simplify the disciplinary proceedings].)
AUTHORITIES SUPPORTING DISCIPLINE.
The Standards for Attorney Sanctions for Professional Misconduct provide a "process of fixing discipline" pursuant to a set of written principles to "better discharge the purposes of attorney discipline as announced by the Supreme Court." (Rules Proc. of State Bar, tit. IV, Stds. for Atty. Sanctions for Prof. Misconduct, Introduction (all further references to standards are to this source).) The primary purposes of disciplinary proceedings and of the sanctions imposed 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." (ln re Morse (1995) 11 Cal.4th 184, 205; std 1.3.)
Although not binding, the standards are entitled to "great weight" and should be followed "whenever possible" in determining level of discipline. (ln re Silverton (2005) 36 Cal.4th 81, 92, quoting In re Brown (1995) 12 Cal.4th 205,220 and In re Young (1989) 49 Cal.3d 257, 267, fn. 11.) Adherence to the standards in the great majority of cases serves the valuable purpose of eliminating disparity and assuring consistency, that is, the imposition of similar attorney discipline for instances of similar attorney misconduct. (In re Naney (1990) 51 Cal.3d 186, 190.) Any discipline recommendation different from that set forth in the applicable standards should clearly explain the reasons for the deviation. (Blair v. State Bar (1989) 49 Cal.3d 762, 776, fn. 5.)
Respondent admits to committing two acts of professional misconduct. Standard 1.6 (a) requires that where a Respondent acknowledges two or more acts of misconduct, and different sanctions are prescribed by the standards that apply to those acts, the sanction imposed shall be the more or most severe prescribed in the applicable standards.
The most severe sanction applicable to Respondent’s misconduct is found in standard 2.2(b), which applies to Respondent’s violation of Rules of Professional Conduct, rule 4-100(B)(3) for failure to render an appropriate accounting.
Standard 2.2(b) provides that culpability of a member of commingling of entrusted funds or property with personal property or the commission of another violation of rule 4-100, Rules of Professional Conduct, none of which offenses result in the willful misappropriation of entrusted funds or property, shall result in at least a three month actual suspension from the practice of law, irrespective of mitigating circumstances. Here, Respondent failed to provide Hernandez with an appropriate accounting of the $5,000 in advanced fees.
Notwithstanding, it does not appear to have been the intent of the drafters of the Standards to apply standard 2.2(b) to misconduct wholly unrelated to entrusted client funds. In In the Matter of Fonte (Review Dept. 1994) 2 Cal. State Bar Ct. Rptr. 752, the Review Department for the first time applied Rule 4-100(B)(3) to require an attorney to account for advanced fees. Standard 2.2(b) predates Fonte’s extension of rule 4-100(B)(3) to encompass advanced fees. Accordingly, the focus, here, should be on the gravamen of Respondent’s misconduct, which is her failure to promptly refund $5,000 in unearned fees.
Standard 2.10 applies to Respondent’s failure to promptly refund unearned fees in violation of Rules of Professional Conduct, rule 3-700(D)(2). Standard 2.10 provides that culpability of a member of a violation of any provision of the Business and Professions Code or any Rule of Professional Conduct not otherwise specified in the standards 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 purposes of imposing discipline set forth in standard 1.3. The extent of Respondent’s misconduct includes a failure to provide a refund over four (4) years. As described above, Hernandez was financially harmed by Respondent’s delayed refund of unearned fees. Therefore, neither private reproval nor public reproval would be sufficient discipline in this case.
While standard 2.10 calls for a range of discipline consisting of reproval to suspension, standard 2.2(b) requires a three-month actual suspension. Under the current circumstances, there is a compelling justification and reason to deviate from standard 2.2(b) and impose lesser discipline. (See In re Silverton, supra, 36 Cal.4th at p.92.) Standard 1.6(b)(ii) states that a "lesser degree of sanction.., shall be imposed or recommended" if mitigating circumstances are present and the purposes of imposing sanctions in standard 1.3 will still be properly fulfilled in light of the balance between aggravating and mitigating circumstances. As stated above, the essence of Respondent’s misconduct is her failure to promptly refund the $5,000 in unearned fees.
In cases involving an attorney’s failure to refund unearned fees where no substantial mitigation was found, courts have ordered actual suspension. (See, e.g., In the Matter of Copren (Review Dept. 2005) 4 Cal. State Bar Ct. Rptr. 861 [60 days actual suspension where attorney failed to refund unearned fee and perform in one client matter, but no substantial mitigation]; Bach v. State Bar (1991) 52 Cal.3d 1201 [30 days actual suspension where attorney failed to refund unearned fees, failed to perform, failed to communicate, and failed to cooperate in State Bar investigation, and 20 years no prior discipline]; Matthew v. State Bar (I 989) 49 Cal.3d 784 [60 days actual suspension where respondent abandoned two clients and failed to refund unearned fees to them, and failed to perform legal services with competence for third client, but there was no substantial mitigation].
In Bach v. State Bar (1991) 52 Cal.3d 1201, the court found that the attorney was culpable of failing to perform, failing to refund unearned fees, and failing to cooperate with a State Bar investigation. In particular, the attorney was retained and paid $3,000 in advanced fees to file a dissolution petition. For two and a half years, the attorney failed to communicate with his client, perform any work for his client, or refund unearned fees to his client. The court determined that a 30-day actual suspension was an appropriate level of discipline, finding in mitigation his lack of prior record of discipline for twenty years, but finding in aggravation the attorney’s "feckless suggestion" to the court that additional mitigating factors existed and his "lack of insight into the deficiencies of his professional behavior." (Id. at 1208.)
While Respondent’s misconduct here concerned a failure to refund a greater amount of unearned fees than in Bach, the extent of Respondent’s misconduct is less. Respondent has been more cooperative and responsive than Bach was in so far as she has cooperated with the State Bar by agreeing to stipulate to the discipline at an early stage in the disciplinary proceedings, and she has already refunded Hernandez in full. Additionally, whereas in Bach the only mitigating factor was a record of no prior discipline, here Respondent has several mitigating that factors equal or outweigh any aggravating factors. Therefore, the instant discipline for Respondent’s misconduct should be less severe than in Bach.
Accordingly, an eighteen-month stayed suspension, with two years of probation, and no actual suspension, is an appropriate level of discipline for Respondent’s misconduct described herein.
PENDING PROCEEDINGS.
The disclosure date referred to, on page 2, paragraph A(7), was December 20, 2012.
COSTS OF DISCIPLINARY PROCEEDINGS.
Respondent acknowledges that the Office of the Chief Trial Counsel has informed Respondent that as of November 17, 2012, the prosecution costs in this matter are approximately $2,865.
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.
EXCLUSION FROM MCLE CREDIT
Pursuant to rule 3201, Respondent may not receive MCLE credit for completion of State Bar Ethics School. (Rules Proc. of State Bar, rule 3201.)
SIGNATURE OF THE PARTIES
Case Number(s): 12-O-14892
In the Matter of: Annette L. Goudy
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: Annette L. Goudy
Date: December 21, 2012
Respondent’s Counsel: Arthur l. Margolis, Esq.
Date: December 25, 2012
Deputy Trial Counsel: Nada M. Alnajafi
Date: December 26, 2012
Case Number(s): 12-O-14892
In the Matter of: Annette L. Goudy
Finding the stipulation to be fair to the parties and that it adequately protects the public, IT IS ORDERED that the requested dismissal of counts/charges, if any, is GRANTED without prejudice, and:
checked. The stipulated facts and disposition are APPROVED and the DISCIPLINE RECOMMENDED to the Supreme Court.
<<not>> checked. The stipulated facts and disposition are APPROVED AS MODIFIED as set forth below, and the DISCIPLINE IS RECOMMENDED to the Supreme Court.
<<not>> checked. All Hearing dates are vacated.
The parties are bound by the stipulation as approved unless: 1) a motion to withdraw or modify the stipulation, filed within 15 days after service of this order, is granted; or 2) this court modifies or further modifies the approved stipulation. (See rule 5.58 (E) & (F), Rules of Procedure.) The effective date of this disposition is the effective date of the Supreme Court order herein, normally 30 days after the file date. (See rule 9.18(a), California Rules of Court.)
Signed by:
Judge of the State Bar Court: George E. Scott, Judge Pro Tem
Date: January 11, 2013
[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 January 14, 2013, 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:
ARTHUR MARGOLIS
MARGOLIS & MARGOLIS LLP
2000 RIVERSIDE DRIVE
LOS ANGELES, CA 90039
checked. by interoffice mail through a facility regularly maintained by the State Bar of California addressed as follows:
NADA ALNAJAFI, Enforcement, Los Angeles
I hereby certify that the foregoing is true and correct. Executed in Los Angeles, California, on January 14, 2013.
Signed by:
Angela Carpenter
Case Administrator
State Bar Court