In Re Silverton

113 P.3d 556, 29 Cal. Rptr. 3d 766, 36 Cal. 4th 81, 2005 Cal. Daily Op. Serv. 5497, 2005 Daily Journal DAR 7579, 2005 Cal. LEXIS 6848
CourtCalifornia Supreme Court
DecidedJune 23, 2005
DocketS123042
StatusPublished
Cited by2 cases

This text of 113 P.3d 556 (In Re Silverton) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Silverton, 113 P.3d 556, 29 Cal. Rptr. 3d 766, 36 Cal. 4th 81, 2005 Cal. Daily Op. Serv. 5497, 2005 Daily Journal DAR 7579, 2005 Cal. LEXIS 6848 (Cal. 2005).

Opinion

Opinion

BAXTER, J.

In 1975, this court ordered petitioner Ronald Robert Silverton disbarred based on his felony convictions for conspiracy to obtain money by false pretenses and to present a fraudulent insurance claim as well as for soliciting another to commit or join in the commission of grand theft. (In re Silverton (1975) 14 Cal.3d 517, 519 [121 Cal.Rptr. 596, 535 P.2d 724].) After three unsuccessful applications, petitioner was reinstated as a member of the State Bar on October 6, 1992. Less than two years later, he began a series of client transactions that became the subject of another disciplinary proceeding charging violations of rules 3-300 and 4-200 of the Rules of Professional Conduct. 1 The Review Department of the State Bar Court (Review Department) ultimately concluded that petitioner violated rule 4-200 with respect to three matters and violated rule 3-300 with respect to one other matter and recommended that petitioner be placed on two years’ stayed suspension and three years’ probation with various conditions, including a 60-day period of actual suspension.

In determining the appropriate level of discipline to recommend to this court, the Review Department considered the Rules of Procedure of the State Bar, title IV, Standards for Attorney Sanctions for Professional Misconduct (Standards), including standard .1.7(a) (Effect of Prior Discipline (standard 1.7(a)). Standard 1.7(a) directs'¡that the degree of discipline imposed on a member with a prior record of discipline “shall be greater than that imposed in the prior proceeding unless the prior discipline imposed was so remote in time to the current proceeding and the offense for which it was imposed was so minimal in severity that imposing greater discipline in the current proceeding would be manifestly unjust.” (Italics added.) However, the Review Department declined to apply standard 1.7(a), which would have resulted in disbarment, based solely on its belief that “doing so would, in our view, be manifestly unjust, particularly in light of the fact that [petitioner]’s prior record is very remote in time.”

Silverton petitioned for our review. (Cal. Rules of Court, rule 952(a).) We denied the petition but granted review on our own motion to settle important *84 questions of law concerning the discipline of attorneys who had previously been disbarred and to consider whether the discipline recommended here was appropriate in light of the record as a whole. (Cal. Rules of Court, rule 954(a)(1), (5).) As explained below, we reject the Review Department’s recommendation and conclude instead that Silverton should be disbarred for a second time.

I

The procedural history of this disciplinary proceeding is lengthy but largely irrelevant to the issue presented here. We therefore need discuss only the misconduct found by the Review Department and the recommended discipline.

The Hou Matter (Case No. 95-0-10829—Count 1)

On June 25, 1992, Janette Hou was injured in a traffic accident with a truck operated by Durham Transportation, Inc. (Durham). Janette retained Attorney David L. Watson to represent her and her children, Raymond and Philip, in their claims against Durham. Janette’s mother-in-law, Fan Hou, also retained Watson. Under the retainer agreements, Watson was to receive a contingent fee of one-third of the gross recovery if the claims were settled before filing suit or demand for arbitration and 40 percent thereafter. The agreements also entitled Watson to one-third of any “excess medical pay” he was able to recover on their behalf.

Watson eventually filed a lawsuit against Durham and, on June 1, 1994, associated Silverton to assist in the Hou matter. Watson informed the Hous of this arrangement and assured them it would not result in an increase in fees. Later that month, Silverton arranged to settle the Hous’ lawsuit against Durham for $16,500, of which $9,500 was allocated to Janette and her sons and $7,000 was allocated to Fan. After deducting attorney fees and costs, Janette’s recovery was to be $5,500 and Fan’s recovery was to be $4,000. Janette and her sons, however, had medical bills of $4,311; Fan had medical bills of $3,680.

Watson, in the meantime, had received $7,391 in medical payment coverage from the Hous’ automobile insurer, 20th Century Insurance. From this sum, Watson deducted $2,470.32 as fees 2 and placed the remaining $4,910.68 *85 in his trust account. 3 Of this latter amount, Janette and her sons were allocated approximately $2,557, and Fan was allocated approximately $2,353. Thus, after taking into account medical bills and the medical payments from 20th Century Insurance, Janette’s net recovery was $3,746 ($5,500 minus $4,311 plus $2,557), and Fan’s net recovery was $2,673 ($4,000 minus $3,680 plus $2,353).

At that point, Silverton proposed, and Janette and Fan signed, an “AUTHORIZATION TO COMPROMISE DOCTOR’S BILL,” which gave the Silverton Law Offices the right to compromise their medical bills “and keep the amount saved by said compromise as an addition to its fees and costs for handling said accident case.” In return, Silverton offered Janette an additional $254, increasing her recovery from $3,746 to $4,000, and offered Fan an additional $327, increasing her recovery from $2,673 to $3,000. The authorization recited that it was “given in consideration for the fact that the Silverton Law Offices has reduced the medical bills in considering the disbursement to me and has accepted as its risk the possibility that the doctor may not compromise to the extend [sic] I have been benefitted [sic] by the consideration of said compromise on the Disbursement Sheet.” Silverton distributed the settlement proceeds to Janette and Fan in checks dated August 30, 1994. The settlement drafts, however, were not actually issued by Durham until September 8, 1994.

Silverton eventually compromised all of the medical charges, which were originally $7,991, for $5,500. As a result, Silverton retained, in addition to the sums provided in the original contingent fee agreement, a total of $1,910, which represented the reduction in the medical bills ($2,491) less the amount advanced to the Hous ($581). In other words, Silverton retained over three-quarters of the reduction in the medical bills.

The Review Department determined that the arrangement involving a compromise of the medical bills was a business transaction, in that “the authorization to compromise constituted an immediate transfer from the Hous of both the ownership and possessory interest in all funds remaining after payment to the Hous of their distributive share of the settlement proceeds and the payment of attorney fees as called for in the original retainer agreement” in exchange for an upfront payment by the attorney.

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Bluebook (online)
113 P.3d 556, 29 Cal. Rptr. 3d 766, 36 Cal. 4th 81, 2005 Cal. Daily Op. Serv. 5497, 2005 Daily Journal DAR 7579, 2005 Cal. LEXIS 6848, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-silverton-cal-2005.