In the Matter of Kennon (1990)

Citation: 1 Cal. State Bar Ct. Rptr. 267
Court: State Bar Court, Review Department
Judge: Stovitz, J. (Opinion by Review Dept.)

Background and Facts

Respondent William Reamy Kennon was admitted to practice in 1976 and had no prior discipline. Between 1983 and 1986, he represented several clients in civil, probate, and small business matters. The State Bar charged him in four client matters with failure to perform legal services, failure to communicate, and misappropriation of client funds. After a full evidentiary hearing, the referee found misconduct in two matters but dismissed the others for insufficient proof.

In the Allied matter, Kennon was consulted about a possible business dispute. The State Bar alleged he had agreed to file a lawsuit but failed to do so. The referee found the client’s testimony inconsistent and the documentary evidence inconclusive, determining there was no clear and convincing proof that Kennon had ever agreed to represent Allied in litigation. That count was dismissed.

In the Garden Grove matter, Kennon accepted $2,000 in advance fees to prepare incorporation papers and handle related business filings. He began the work but never completed the incorporation documents. When the client requested the return of unused funds, Kennon delayed and failed to issue a prompt refund. Evidence also showed he accepted $112 to pay a court filing fee but never filed the complaint. Although his accounting practices were sloppy, there was no clear and convincing evidence of intentional misappropriation or dishonest conversion of client money. The Review Department agreed with the referee that this amounted to negligence, not moral turpitude.

A third client hired Kennon for estate-related work. He failed to complete the probate documents in a timely fashion, then ceased communication when the client tried to terminate the relationship. He retained unearned fees and did not return the client’s file until contacted by the State Bar.

In a fourth matter, involving a disputed settlement check, the Bar alleged Kennon failed to maintain client trust funds in a separate account. The referee found the evidence ambiguous and concluded that, while Kennon’s bookkeeping was deficient, the State Bar failed to establish misappropriation or a §6106 violation. The Review Department affirmed, noting that not every trust-account irregularity constitutes moral turpitude.

Violations and Legal Findings

• Failure to perform competently — former Rule 6-101(A)(2)/(B) (now Rule 3-110(A))
• Failure to refund unearned fees — former Rule 2-111(A)(3) (now Rule 3-700(D)(2))
• Improper withdrawal — former Rule 2-111(A)(2) (now Rule 3-700(A)(2))
• Failure to communicate — §6068(m) (limited to conduct after statute’s effective date)
• Dismissed — misappropriation (§6106), trust-account violations (Rule 4-100), and disobedience of court orders (§6103)

Aggravation and Mitigation

• Aggravation: Multiple acts of neglect and delay across several clients; partial harm to clients who were required to hire new counsel; failure to timely refund fees; and some lack of candor during initial Bar inquiries.
• Mitigation: No prior discipline in over a decade of practice; credible evidence of financial stress and medical problems during the period; good character evidence from fellow attorneys; and later restitution to affected clients. Kennon was cooperative during proceedings and expressed remorse.

Procedural Notes

The Review Department conducted an independent review but gave great weight to the referee’s credibility determinations, particularly where witnesses’ demeanor and recollection conflicted. The opinion reaffirmed that independent review does not mean full reweighing of credibility where the hearing judge had superior vantage.

Holding and Discipline

The Review Department found that Kennon’s repeated failure to perform and to refund unearned fees warranted actual suspension. The misconduct did not rise to moral turpitude, but cumulative neglect and financial irresponsibility required public protection. Public reproval alone was deemed insufficient.

Sanctions / Conditions

Significance

Kennon reaffirms that poor office management and negligent bookkeeping, without intent to defraud, do not amount to moral turpitude. However, repeated failure to act diligently and promptly refund unearned fees can still warrant suspension. The case also highlights the Review Department’s deference to referee credibility findings and its focus on proportional sanctions balancing protection of the public with rehabilitation.

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