In the Matter of Respondent E (Review Dept. 1991) 1 Cal. State Bar Ct. Rptr. 716
Facts
Originating area of law: Business and commercial litigation — trust-account management of client funds. Respondent, a 40-year veteran with an otherwise strong record, was aberrationally negligent in handling a client check. A new bookkeeper mistakenly billed a client for an expert witness fee that had never been paid. The client paid the bill, and the funds were deposited in the general account rather than trust. Years later, the error was discovered amid a fee dispute, and respondent failed to segregate the funds or promptly resolve the issue.
Charges and Proceedings
Originally charged with intentional misappropriation under Business & Professions Code §6106, the notice was later amended to allege commingling under former Rule 8-101(A). The hearing judge found no intent to misappropriate but concluded that delayed awareness and handling amounted to moral turpitude and recommended a three-month actual suspension. The Review Department disagreed, holding that the error was isolated and non-willful, that restitution was effected through fee-arbitration offset, and that moral turpitude was not proven.
Sanctions Table
| Charge | Defense / Explanation | Mitigation | Aggravation | Outcome |
|---|---|---|---|---|
| Commingling and failure to retain disputed funds in trust | Isolated clerical error by new bookkeeper; respondent had elaborate controls and no knowledge until years later. | Over 40 years practice with no similar issues; impeccable character; pro bono service; community work; full cooperation with State Bar. | Minimal delay in resolution; initial failure to segregate funds once aware. | Culpable of commingling only; no moral turpitude found. |
| Failure to make restitution | Claimed restitution via arbitration offset approved by client’s new counsel. | Restitution effectively made; good faith belief issue resolved in arbitration. | None found on review. | No further restitution required. |
| Alleged lack of candor and gross negligence | Respondent’s testimony plausible and uncontradicted; no intent to mislead. | Credibility restored on review; no prior discipline since 1950s minor reproval. | None established by clear and convincing evidence. | Findings of aggravation reversed. |
| Final discipline | Commingling arose from good-faith fee dispute and bookkeeping error. | Exceptional mitigation; aberrational event in a distinguished career. | None sustained on review. | Private reproval with condition to pass Professional Responsibility Exam within one year. |
Result and Significance
The Review Department emphasized that a single administrative error in an otherwise sound trust-account system does not constitute moral turpitude or gross negligence. Because the error was isolated and promptly acknowledged, discipline was limited to a private reproval with an ethics-exam condition. The decision illustrates that commingling arising from good-faith fee disputes and office mistakes may be disciplined minimally when mitigation is strong and public protection is not endangered.
Tags
Citation: In the Matter of Respondent E (Review Dept. 1991) 1 Cal. State Bar Ct. Rptr. 716.