In the Matter of Stephen Rawliegh Golden (Review Dept. 2018)

5 Cal. State Bar Ct. Rptr. 574 | Filed May 30, 2018

Overview: Attorney Stephen Rawliegh Golden was found culpable of 25 counts of professional misconduct across 11 client matters, primarily involving violations of California statutes regulating home loan modification services. Golden collected unlawful advance fees, failed to provide mandatory client disclosures, and neglected to provide accountings or refunds upon termination. The Review Department affirmed a one-year actual suspension, continuing until full restitution and proof of rehabilitation.

Background and Misconduct

Golden operated a law practice focusing on “foreclosure defense” and home loan modifications. Between 2010 and 2016, he charged clients monthly “advance fees” before completing any loan modification services, contrary to Civil Code §2944.7 and Business and Professions Code §6106.3. He also failed to provide required disclaimers under Civil Code §2944.6 advising clients that a third-party negotiator was unnecessary. His conduct affected 11 clients and totaled over $283,000 in illegal fees.

Golden argued that his work was foreclosure litigation, not loan modification, and thus outside the statutory prohibition. The Review Department rejected this, holding that the statutory scheme makes no exception for attorneys who plan to litigate if a loan modification is denied. The court cited In the Matter of Taylor (2012) 5 Cal. State Bar Ct. Rptr. 221, reaffirming that any pre-performance fees for modification-related services are prohibited.

Key Legal Findings

• Violation of Civil Code §2944.7: Collected advance fees prior to completing contracted services in 11 client matters.
• Violation of Civil Code §2944.6: Failed to provide required written disclaimer in three matters.
• Rule 4-100(B)(3): Failed to render accountings for client funds in 11 matters.

Aggravation and Mitigation

Aggravating factors: Multiple acts of wrongdoing, overreaching (including taking settlement funds without authority), uncharged misconduct, significant client harm, indifference to restitution, and failure to repay over $278,000. His ongoing operation of a similar business despite warnings was viewed as a continuing threat to the public.

Mitigating factors: Seventeen years of prior discipline-free practice and cooperation with the State Bar (stipulating to key facts). However, these factors were given minimal weight because his conduct was not aberrational or unlikely to recur.

Sanction

The Review Department imposed a two-year stayed suspension, three years’ probation, and a minimum of one year actual suspension continuing until Golden:

• Makes full restitution of approximately $278,000 plus interest to all affected clients;
• Proves rehabilitation, fitness to practice, and learning in the law;
• Completes State Bar Ethics School and passes the MPRE.

Holding

Attorneys who perform or offer home loan modification services may not collect advance fees prior to completing all services. No exception exists for “foreclosure defense” or concurrent litigation. Reliance on informal State Bar advice or ambiguity in the statute does not excuse misconduct. The purpose of discipline—public protection and confidence—justified continued suspension pending restitution and rehabilitation.

Sanctions Table