Case Number(s): 08-O-11773, 10-O-07590
In the Matter of: Steven Zelig, Bar # 94654, A Member of the State Bar of California, (Respondent).
Counsel For The State Bar: Katherine Kinsey, State Bar of California, 1149 S. Hill Street, Los Angeles, CA 90015, 213-765-1503, Bar# 183740
Counsel for Respondent: Arthur L. Margolis, Margolis & Margolis LLP, 2000 Riverside Dr., Los Angeles, CA 90039, 323-953-8996, Bar # 57703
Submitted to: Settlement Judge, State Bar Court Clerk’s office Los Angeles .
Filed: 09/12/2011
<<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 December 16, 1980.
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.
Additional aggravating circumstances:
Additional mitigating circumstances: Respondent was admitted to the practice of law on December 16, 1980 and has no prior record of discipline.
PAYMENT OF SANCTIONS:
Within thirty (30) days from the effective date of discipline in these matters, Respondent shall pay the sanctions as ordered by the court in the underlying matters as set forth below:
Case number 08-O-11773 Party Owed Scottsdale Insurance Company Amount $8,250
Case number 08-O-11773 Party Owed Scottsdale Insurance Company Amount $7,500
Respondent must provide to the Office of Probation
satisfactory proof of the payments made by Respondent during the applicable
reporting period. Such proof must be in a form satisfactory to the Office of
Probation
IN THE MATTER OF: Steven Zelig, State Bar No. 94654
STATE BAR COURT CASE NUMBER: 08-O-11773, 10-O-07590
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. 08-O-11773 (State Bar Investigation)
Facts related to Regency Complaint
1. On January 17, 1994, Regency Royale Homeowners Association ("Regency") allegedly sustained damaged in the Northridge earthquake. In June 1994, Regency submitted an application for earthquake insurance to Scottsdale Insurance Company ("Scottsdale") stating that it had sustained no losses in the previous five years and Scottsdale issued insurance coverage to Regency.
2. On December 31, 2001, in pursuit of Regency’s earthquake insurance claim, Respondent filed a civil action against Scottsdale entitled Waldman et al. v. Golden Bear et al., Los Angeles County Superior Court, case no. BC265308 (the "Regency complaint").
3. Between January 2002 and May 2002, Scottsdale informed Regency’s insurance adjuster that Scottsdale did not insure Regency until six months after the Northridge earthquake. On July 8, 2002, Respondent served the Regency complaint on Scottsdale.
4. In October 2002, Scottsdale provided documentation in discovery showing that Scottsdale issued its insurance policy to Regency six months after the Northridge earthquake. In addition, Regency’s insurance adjuster told Respondent’s office that Farmers and State Farm insured Regency’s property at the time of the earthquake. However, Respondent did not dismiss the Regency complaint. Subsequently, new counsel associated in as counsel for Regency, acknowledged that Scottsdale was not the proper insurer and dismissed Scottsdale from Regency complaint. Scottsdale incurred in excess of $30,000 in attorney’s fees related to the Regency complaint.
5. On September 10, 2004, Scottsdale filed a malicious prosecution complaint against Respondent and others in order recoup the attorney’s fees from the Regency complaint (the "Scottsdale action").
6. On January 29, 2007, the parties reached a settlement in the Scottsdale action. Pursuant to the settlement, Respondent agreed to pay Scottsdale $45,000 within 45 days. Thereafter, Respondent failed to pay the settlement.
7. Therefore, on March 22, 2007, Scottsdale filed a motion for entry of judgment against Respondent’s law office, which the court granted. On April 3, 2007, the judgment was entered.
8. As of April 13, 2007, Respondent had not paid the judgment, and Scottsdale filed a motion to amend the judgment to add Respondent personally. In its motion, Scottsdale noted that Respondent had previously testified that he and the law office were one and the same. Respondent opposed the motion to amend.
9. On May 16, 2007, the court in the Scottsdale action granted Scottsdale’s motion and entered an amended judgment against Respondent for $45,000. On June 4, 2007, Respondent appealed the court’s May 16, 2007 ruling (the "judgment appeal")
10. On February 19, 2008, Scottsdale filed a motion for sanctions arguing that the judgment appeal was frivolous.
11. On February 21, 2008, the Court of Appeal wrote Respondent a letter notifying him that he had ten days from the date of the letter to file a supplemental letter in opposition to the imposition of sanctions. On March 10, 2008, Respondent filed opposition to the imposition of sanctions.
12. On April 10, 2008, the Court of Appeal issued an opinion denying the judgment appeal. In its opinion, the Court of Appeal stated that there was substantial evidence supporting the trial court’s order naming Respondent as a judgment debtor and stated that it had little trouble finding Respondent’s appeal to be frivolous. Specifically, the Court of Appeal stated that the appeal indisputably had no merit, appeared to have been filed for the improper purpose of delaying the effect of the judgment adverse to Respondent and continued a pattern throughout the case of abusing the legal system.
13. In the April 10, 2008 order, the Court of Appeal affirmed the judgment and ordered
Respondent to pay $8,250 in sanctions to Scottsdale for prosecuting the judgment appeal. The Court of Appeal ordered Respondent to pay the sanctions within 30 days after the issuance of the remittitur or by July 12, 2008. Respondent was properly served with the court’s order.
14. Respondent did not pay the $8,250 in sanctions as ordered by the Court of Appeal in the judgment appeal.
Facts Related to Respondent’s Cross-Complaint
15. On February 14, 2005, Respondent’s law office filed a cross-complaint against Regency, Condominium Administration Company, Inc. ("CAC") and a third cross-defendant in the Scottsdale action.
16. On March 10, 2005, Regency filed an answer to Respondent’s cross-complaint.
17. On July 17, 2006, after a trial date had been set in the Scottsdale action and without leave of the court, Respondent and his law office filed another cross-complaint against Scottsdale, Regency, CAC and additional cross-defendants.
18. Regency and CAC filed motions to strike the July 17, 2006 cross-complaint on the grounds that Respondent did not obtain leave of the court before filing another cross-complaint. On or about September 25, 2006, the trial court granted the motions. On November 27, 2006, Respondent appealed the trial court’s September 25, 2006 ruling.
19. On November 30, 2006, an attorney for Scottsdale wrote a letter to Respondent asking him to dismiss his appeal because the court’s September 25, 2006 order was not appealable. Respondent received the letter but did not dismiss the appeal.
20. On September 17, 2007, Scottsdale filed a motion to dismiss the appeal and on or about October 10, 2007, Respondent filed opposition to the motion to dismiss.
21. On November 13, 2007, the Court of Appeal granted the motion to dismiss and imposed $7,500 in sanctions against Respondent on the grounds that Respondent’s appeal was frivolous. Respondent was properly served with the Court of Appeal’s order.
22. Respondent did not pay the $7,500 in sanctions as ordered by the Court of Appeal.
23. On or about May 13, 2008, Respondent untimely reported to the State Bar of California that sanctions exceeding $1,000 were imposed against him.
CONCLUSIONS OF LAW
By pursing a frivolous appeal before the California Court of Appeal related to the Regency complaint, Respondent failed to maintain such action, proceedings, or defenses only as appear to him legal or just in willful violation of Business and Professions Code, section 6068(c).
By failing to pay the $8,250 in sanctions as ordered by the Court of Appeal in the Regency complaint, Respondent disobeyed or violated 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 in willful violation of Business and Professions Code, section 6103.
By failing to pay the sanctions as ordered by the Court of Appeal and arising out of Respondent’s cross-complaint, Respondent disobeyed or violated 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 in willful violation of Business and Professions Code, section 6103
By reporting to the State Bar of California on May 13, 2008 that sanctions in excess of $1,000 had been imposed against him, Respondent failed to report to the agency charged with attorney discipline, in writing, within 30 days of the time Respondent had knowledge of the imposition of any judicial sanctions against Respondent in willful violation of Business and Professions Code, section 6068(0) (3).
Case No. 10-O-07590 (State Bar Investigation)
FACTS:
1. On March 26, 2009, Respondent filed a lawsuit on behalf of Classic Yam entitled Classic Yarn Co., Inc. et al. v. LG Insurance Co, et al., Los Angeles County Superior Court, case no. BC410492 (the "Classic Yarn complaint"). On May 11, 2009, the Classic Yam complaint was removed to United States District Court, case no. 2:09-cv-03320 (the "Classic Yam action").
2. On July 15, 2009, the court granted a motion to strike dismissing various plaintiff claims with prejudice. Respondent was properly served with the court’s July 15, 2009 order.
3. On August 27, 2009, Respondent filed a First Amended Complaint ("FAC") in the Classic Yarn action and included causes of actions that had been dismissed or stricken.
4. On August 31, 2009, defense counsel in the Classic Yam action sent a letter to Respondent by facsimile outlining the portions of the FAC that had been ordered stricken by the court. In the August 28, 2009 letter, defense counsel asked Respondent to prepare as stipulation striking the applicable portions of the FAC. In the letter, defense counsel informed Respondent that if they did not receive a stipulation and proposed order, they would likely file a Rule 11 motion. Respondent received the letter.
5. On September 1, 2009, Respondent responded to defense counsel’s August 28, 2009 letter asking defense counsel to prepare the stipulation.
6. On September 3, 2009, defense counsel forwarded a draft stipulation and proposed order striking the improper portions of the FAC. In the letter, defense counsel asked Respondent to let them know by September 4, 2009 if he was willing to sign the stipulation or, alternatively, agree to extend defendant’s time to respond to the complaint. On or about September 3, 2009, defense counsel sent the letter and the proposed stipulation and order to Respondent by facsimile. Respondent received the letter and its enclosures but did not sign the stipulation or otherwise respond to defense counsel’s September 3, 2009 letter.
7. On September 8, 2009, opposing counsel filed a motion to strike portions of the FAC. In addition, on October 5, 2009, opposing counsel filed a motion for Rule 11 sanctions. On October 9, 20.09, the district court granted the motion to strike portions of the FAC.
8. On October 19, 2009, Respondent filed opposition to the motions for sanctions. In his opposition, Respondent stated that he had erroneously included causes of action that were stricken by the court.
9. On November 6, 2009, the district court in the Classic Yam action granted the motion for sanctions and ordered Respondent to pay $4,032 in sanctions finding that Respondent’s FAC "was made for the improper purpose of causing unnecessary delay and needlessly increasing the cost of litigation." The court ordered Respondent to pay the sanctions before December 2, 2009. The court properly served the November 6, 2009 court order on Respondent. Respondent received the court’s November 6, 2009 order.
10. On February 3, 2010, Respondent paid the $4,032 in sanctions to opposing counsel.
CONCLUSIONS OF LAW:
By filing a First Amended Complaint in the Classic Yam action that contained actions that had already been stricken by the court, Respondent failed maintain such action, proceedings, or defenses only as appear to him legal or just in willful violation of Business and Professions Code, section 6068(c).
By not timely paying the sanctions by December 2, 2009 as ordered by the court, Respondent disobeyed or violated 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 in willful violation of Business and Professions Code section 6103.
PENDING PROCEEDINGS.
The disclosure date referred to, on page 2, paragraph A(7), was August 26, 2011.
AUTHORITIES SUPPORTING DISCIPLINE:
Standard 2.6 (a) states that any violations of Business and Professions Code, section 6068 shall result in disbarment or suspension depending on the gravity of the offense and the harm, if any, to the victim.
Standard 2.6 (b) states that any violation of Business and Professions Code, section 6103 shall result in disbarment or suspension depending on the gravity of the offense and the harm, if any, to the victim.
Case Number(s): 08-O-11773, 10-O-07590
In the Matter of: Steven Zelig
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: Steven Zelig, Arthur Margolis, and Katherine Kinsey
Respondent: Steven Zelig
Date: 08/31/2011
Respondent’s Counsel: Arthur Margolis
Date: 09/06/2011
Deputy Trial Counsel: Katherine Kinsey
Date: 09/06/2011
Case Number(s): 08-O-11773, 10-O-07590
In the Matter of: Steven Zelig
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: Donald F. Miles
Judge of the State Bar Court: Donald F. Miles
Date: 09/12/2011
[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 September 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:
ARTHUR LEWIS MARGOLIS, ESQ.
MARGOLIS & MARGOLIS LLP
2000 RIVERSIDE DR
LOS ANGELES, CA 90039
checked. by interoffice mail through a facility regularly maintained by the State Bar of California addressed as follows:
KATHERINE KINSEY, ESQ., office of Enforcement, Los Angeles
I hereby certify that the foregoing is true and correct. Executed in Los Angeles, California, on September 12, 2011.
Signed by: Rosie Luthi
Case Administrator
State Bar Court