In re Berchan

100 A.D.3d 249, 952 N.Y.S.2d 626

This text of 100 A.D.3d 249 (In re Berchan) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Berchan, 100 A.D.3d 249, 952 N.Y.S.2d 626 (N.Y. Ct. App. 2012).

Opinion

[250]*250OPINION OF THE COURT

Per Curiam.

The Supreme Court of the State of California issued two orders disciplining the respondent: an order filed October 13, 2010 (2010 Cal LEXIS 10179 [Sup Ct 2010, No. S185145]), and a second order filed October 19, 2011 (2011 Cal LEXIS 11606 [Sup Ct 2011, No. S195617]).

The October 13, 2010 Order

By order filed October 13, 2010, the Supreme Court of the State of California, inter alia, suspended the respondent from the practice of law for a period of two years, stayed execution of the suspension, and placed him on probation for a period of three years on condition that he actually be suspended for the first six months. The underlying facts are set forth in an attachment to the California State Bar “Stipulation Re Facts, Conclusions of Law and Disposition and Order Approving” (hereinafter Stipulation No. 1) submitted and filed in the State Bar Court on June 22, 2010. The misconduct involved two matters handled by the respondent: the Chavez matter and the Donovan matter.

The Chavez Matter

The respondent maintained a client trust account at the Bank of America. In early 2006, Fred Chavez (hereinafter Fred) retained the respondent to represent him in a dissolution of marriage matter. Fred and his wife, Susan Chavez (hereinafter Susan), had been separated since early 2005. In early 2006, the Chavezes’ son received in-patient care at Action Family Counseling (hereinafter AFC) from January 2, 2006 through March 15, 2006. The Chavezes communicated, through respective counsel, their belief and understanding that Fred’s insurance company, Blue Cross of California (hereinafter Blue Cross) would cover the services. On February 16, 2006, Susan wrote a check in the amount of $6,000 to AFC under the belief that she might be reimbursed by Blue Cross. Subsequently, Blue Cross approved the claim for services for the period February 14, 2006 through February 27, 2006, only.

In May 2006, on her own initiative, Susan appealed the decision to the extent the claim was disapproved. On May 26, 2006, Blue Cross informed Susan that only the period January 2, 2006 through February 27, 2006, was covered, totaling $8,366. Blue Cross declined coverage for the period February 27, 2006 through March 15, 2006, totaling $6,052. In the summer of 2006, Susan petitioned to the Department of Managed Health [251]*251Care (hereinafter the DMHC), requesting an independent medical review of Blue Cross’s denial. On July 31, 2006, the DMHC made an administrative exception and agreed to reimburse Susan in the amount of $6,052. However, because Fred was the subscriber to Blue Cross, the check was sent to Fred. Upon receipt of the check, Fred forwarded the check to the respondent, who, on August 21, 2006, deposited it into his client trust account.

On August 22, 2006, the respondent wrote to Susan’s attorney, Frank, informing him that Fred had recently given him a check from Blue Cross payable to Fred in the amount of $6,052. The respondent requested an accounting because Fred believed he had contributed separate property for the benefit of their son and was entitled to offsets. Over the next four months, Susan and her attorney, Frank, sought disbursement of the disputed funds from the respondent’s office. On September 14, 2006, Frank requested that the respondent forward payment of the $6,052 to Frank’s office. The respondent refused to disburse the funds, absent a court order, in light of the parties’ dispute. The respondent indicated that he would not oppose an ex parte application for such an order.

On October 2, 2006, the balance in the respondent’s client trust account fell below zero. The respondent discovered the dip and, in late December, deposited personal funds to replenish the account.

On December 15, 2006, at an ex parte hearing, a Los Angeles Superior Court Judge directed the respondent to disburse to Susan the amount of $6,052 from his client trust account on or before January 1, 2007, and directed the respondent to pay Susan the amount of $1,250 for an attorney’s fee. On December 26, 2006, the respondent wrote Susan a check for $6,052.

Stipulation No. 1 concluded that “[b]y not maintaining at least $6,052 in his [client trust account], [the] [Respondent failed to maintain client funds in a trust account in willful violation of rule 4-100 (A) of the Rules of Professional Conduct.”

The Donovan Matter

In September 2004, Leslie Donovan (hereinafter Leslie) retained the respondent in her dissolution of marriage matter, entitled Floyd E. Donovan v Leslie D. Donovan in Los Angeles County Superior Court. Leslie paid the respondent the amount of $1,000 in advanced attorney’s fees. On September 17, 2004, the respondent substituted in as counsel of record for Leslie.

[252]*252On October 20, 2004, the Donovan residence was sold and Escrow Advantage was authorized by agreement of the parties to disburse $51,000 of the proceeds to “Attorney’s Trust Account.” The parties agreed to put the $51,000 in the respondent’s client trust account, and such funds were deposited into the respondent’s account on November 12, 2004, bringing the balance in the account to $52,613.83. The parties thereafter stipulated to spend the funds to pay off certain debts. The respondent paid out the disbursements as agreed to by the parties. By June 23, 2005, the final set of stipulated expenditures went out from the respondent’s client trust account. The last payment cleared on July 5, 2005. The residual amount was to be held in trust until the parties could reach a stipulated judgment. From July 5, 2005 through August 8, 2006, the respondent should have maintained a minimum balance of $1,408 in his account, representing the residual sum.

On October 20, 2005, the respondent substituted out as Leslie’s attorney of record because Leslie could not pay the additional fees requested by the respondent. The respondent reminded Leslie that he had approximately $1,400 in funds in his client trust account. Leslie filed a substitution of attorney and substituted into her dissolution matter in proper.

Sometime in early 2006, the respondent inadvertently closed the file, unilaterally took his fee in the amount of $1,408, and waived the balance of his fee. A notation in the file, in error, made it appear that the $1,408 was to cover his attorney fees. This disbursement was premature.

The parties submitted a stipulated judgment to the court on June 5, 2006.

On July 10, 2006, the balance in the respondent’s client trust account dipped below zero. The respondent was required to maintain the amount of $1,408 in his account for Leslie’s benefit.

On August 8, 2006, the stipulated judgment was signed, approved, and entered by the court. The judgment provided, in pertinent part, that

“The total amount of the $51,000 held in Respondent’s attorney’s client-trust account that has been spent is $49,519.12. The remaining amount of funds is $1,408. . . . Petitioner [Floyd] shall pay Respondent’s [Leslie’s] attorney’s fees and costs in the amount of [sic] the amount of the remaining funds [253]*253from the proceeds of the sale of the family residence held in Respondent’s attorney client trust fund.”

It was not until January 4, 2007, that Leslie wrote to the respondent requesting that the amount of $1,408 be disbursed to her.

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Bluebook (online)
100 A.D.3d 249, 952 N.Y.S.2d 626, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-berchan-nyappdiv-2012.