Case Number(s): 03-O-02690
In the Matter of: Douglas W. Davis, Bar # 132620, A Member of the State Bar of California, (Respondent).
Counsel For The State Bar: Lee Ann Kern, Bar # 156623
Counsel for Respondent: Douglas W. Davis, Bar # 132620
Submitted to: Assigned Judge – State Bar Court Clerk’s Office Los Angeles.
Filed: September 30, 2005.
<<not>> checked. PREVIOUS STIPULATION REJECTED
Note: All information required by this form and any additional information which cannot be provided in the space provided, must be set forth in an attachment to this stipulation under specific headings, e.g., "Facts," "Dismissals," "Conclusions of Law," "Supporting Authority," etc.
1. Respondent is a member of the State Bar of California, admitted December 14, 1987.
2. The parties agree to be bound by the factual stipulations contained herein even if conclusions of law or disposition are rejected or changed by the Supreme Court.
3. All investigations or proceedings listed by case number in the caption of this stipulation are entirely resolved by this stipulation and are deemed consolidated. Dismissed charge(s)/count(s) are listed under "Dismissals." The stipulation consists of 14 pages, not including the order.
4. A statement of acts or omissions acknowledged by Respondent as cause or causes for discipline is included under "Facts."
5. Conclusions of law, drawn from and specifically referring to the facts are also included under "Conclusions of Law".
6. The parties must include supporting authority for the recommended level of discipline under the heading "Supporting Authority."
7. No more than 30 days prior to the filing of this stipulation, Respondent has been advised in writing of any pending investigation/proceeding not resolved by this stipulation, except for criminal investigations.
8. Payment of Disciplinary Costs-Respondent acknowledges the provisions of Bus. & Prof. Code §§6086.10 & 6140.7. (Check one option only):
checked. Costs are added to membership fee for calendar year following effective date of discipline.
<<not>> checked. Costs are to be paid in equal amounts prior to February 1 for the following membership years: . (Hardship, special circumstances or other good cause per rule 5.132, Rules of Procedure.) If Respondent fails to pay any installment as described above, or as may be modified by the State Bar Court, the remaining balance is due and payable immediately.
<<not>> checked. Costs are waived in part as set forth in a separate attachment entitled "Partial Waiver of Costs".
<<not>> checked. Costs are entirely waived.
Case Number(s): 03-O-02690
In the Matter of: Douglas W. Davis
a. Restitution
checked. Respondent must pay restitution (including the principal amount, plus interest of 10% per annum) to the payee(s) listed below. If the Client Security Fund (“CSF”) has reimbursed one or more of the payee(s) for all or any portion of the principal amount(s) listed below, Respondent must also pay restitution to CSF in the amount(s) paid, plus applicable interest and costs.
1. Payee: Cornelius Scott, M.D.
Principal Amount: $35, 523.50* (* of the total amount of the sanctions ordered by the court against the Respondent and his client, Scott.
Interest Accrues From: January 23, 2001
2. Payee:
Principal Amount:
Interest Accrues From:
3. Payee:
Principal Amount:
Interest Accrues From:
4. Payee:
Principal Amount:
Interest Accrues From:
<<not>> checked. Respondent must pay above-referenced restitution and provide satisfactory proof of payment to the Office of Probation not later than .
checked. Respondent must pay the above-referenced restitution on the payment schedule set forth below. Respondent must provide satisfactory proof of payment to the Office of Probation with each quarterly probation report, or as otherwise directed by the Office of Probation. No later than 30 days prior to the expiration of the period of probation (or period of reproval), Respondent must make any necessary final payment(s) in order to complete the payment of restitution, including interest, in full.
1. Payee/CSF (as applicable): Cornelius Scott, M.D.
Minimum Payment Amount: $1,000.00
Payment Frequency: At least one time per month.
2. Payee/CSF (as applicable)
Minimum Payment Amount
Payment Frequency
3. Payee/CSF (as applicable)
Minimum Payment Amount
Payment Frequency
4. Payee/CSF (as applicable)
Minimum Payment Amount
Payment Frequency
<<not>> checked. If Respondent fails to pay any installment as described above, or as may be modified by the State Bar Court, the remaining balance is due and payable immediately.
<<not>> checked.
1. If Respondent possesses client funds at any time during the period covered by a required quarterly report, Respondent must file with each required report a certificate from Respondent and/or a certified public accountant or other financial professional approved by the Office of Probation, certifying that:
a. Respondent has maintained a bank account in a bank authorized to do business in the State of California, at a branch located within the State of California, and that such account is designated as a “Trust Account” or “Clients’ Funds Account”;
b. Respondent has kept and maintained the following:
i. A written ledger for each client on whose behalf funds are held that sets forth:
1. the name of such client;
2. the date, amount and source of all funds received on behalf of such client;
3. the date, amount, payee and purpose of each disbursement made on behalf of such client; and,
4. the current balance for such client.
ii. a written journal for each client trust fund account that sets forth:
1. the name of such account;
2. the date, amount and client affected by each debit and credit; and,
3. the current balance in such account.
iii. all bank statements and cancelled checks for each client trust account; and,
iv. each monthly reconciliation (balancing) of (i), (ii), and (iii), above, and if there are any differences between the monthly total balances reflected in (i), (ii), and (iii), above, the reasons for the differences.
c. Respondent has maintained a written journal of securities or other properties held for clients that specifies:
i. each item of security and property held;
ii. the person on whose behalf the security or property is held;
iii. the date of receipt of the security or property;
iv. the date of distribution of the security or property; and,
v. the person to whom the security or property was distributed.
2. If Respondent does not possess any client funds, property or securities during the entire period covered by a report, Respondent must so state under penalty of perjury in the report filed with the Office of Probation for that reporting period. In this circumstance, Respondent need not file the accountant’s certificate described above.
3. The requirements of this condition are
in addition to those set forth in rule 4-100, Rules of Professional Conduct.
<<not>> checked. Within one (1) year of the effective date of the discipline herein, Respondent must supply to the Office of Probation satisfactory proof of attendance at a session of the Ethics School Client Trust Accounting School, within the same period of time, and passage of the test given at the end of that session.
IN THE MATTER OF: Douglas W. Davis, State Bar No. 132620
STATE BAR COURT CASE NUMBER: 03-O-02690.
FACTS AND CONCLUSIONS OF LAW.
Respondent admits that the following facts are true and that he/she is culpable of violations of the specified statutes and/or Rules of Professional Conduct.
COUNT ONE:
Business and Professions Code, section 6103
[Failure to Obey a Court Order - Arbitration]
1. On or about January 20, 1999, Cornelius C. Scott, III, M.D. ("Scott"), hired Respondent to represent him in connection with a breach of contract and discrimination action by Scott against his former employer, Gallatin Medical Corporation and others ("the defendants"). The matter was entitled, Scott vs. Gallatin Corporation et al., ease number BS057068.
2. On or about May 7, 1999 Respondent, on Scott’s behalf, filed a petition in which he prayed for arbitration of the matter pursuant to Scott’s employment agreement. On or about June 30, 1999, Respondent filed a First Amended Petition seeking the same relief.
3. The defendants filed a Motion to Stay Proceedings Pending Arbitration and on or about August 18, 1999, the court granted the motion and ordered that arbitration be completed, pursuant to the Gallatin Medical Corporation Arbitration Rules and Procedure, on or before January 18, 2000.
4. Thereafter, Respondent filed a Motion for Order Removing Stay and Reversing Prior Arbitration Order. On or about December 18, 1999, the court denied Respondent’s motion and ordered, for the second time, that arbitration be completed on or before March 31, 2000.
5. On or about February 3, 2000, Respondent called defendants’ counsel and informed her that Scott would not arbitrate the matter pursuant to Gallatin’s rules. As a result of the telephone call, the defendants moved to dismiss the case. In response to defendants’ Motion to Dismiss, Respondent filed an Ex Parte Application for an Order Shortening time; Petition to Appoint Neutral Arbitrator in which he sought relief from the court’s orders to arbitrate, as well as the court’s order to arbitrate under the Gallatin rules.
6. On or about March 30, 2000, the court denied Respondent’s Ex Parte Application, as well as the defendant’s Motion to Dismiss. The parties were again ordered to arbitrate the matter.
7. Respondent again filed a Petition to Remove Stay and Reverse Order. On or about September 29, 2000, the court denied the motion and, for the fourth time, ordered the parties to 8
proceed with arbitration to be completed by January 29, 2001.
8. On or about December 19, 2000, the defendants moved to dismiss Scott’s First Amended Complaint for various reasons, including Respondent and Scott’s failure to follow the orders of the court, which had ruled on the issues of arbitration on four separate occasions. The defendants also requested that sanctions be imposed against Scott and Respondent for their failure to arbitrate the matter.
9. On or about January 23, 2001, the court granted the motion to dismiss and imposed sanctions in the amount of $70,650.99 against Respondent and Scott for failing to comply with the orders of the court ("the January 23, 2001, heating"). The sanctions were ordered to be paid to defendants’ counsel within 30 days of the court’s ruling.
10. LEGAL CONCLUSION: By failing to follow the four orders of the court to proceed with arbitration of Scott’s claims against the defendants, Respondent willfully disobeyed orders of the court, in violation of Business and Professions Code section 6103.
COUNT TWO:
Business and Professions Code, section 6103
[Failure to Obey a Court Order - Payment of Sanctions]
11. The allegations of paragraphs 1 through 9 are incorporated by reference.
12. Respondent was present at the January 23, 2001, heating and heard the court impose sanctions in the amount of $70,650.99 against Respondent and Scott
13. At the January 23, 2001, hearing, defendants’ counsel was ordered by the court to serve a Notice of Ruling as to the court’s orders dismissing Scott’s case and imposing sanctions against Respondent and Scott. Defendants’ counsel served Respondent with the Notice of Ruling and Respondent received and read the Notice.
14. Respondent was aware of the imposition of sanctions against him, but did not pay all or any part of the sanctions to defendants’ counsel within 30 days and, to date, has never paid any part of the sanctions. Respondent did not seek relief from the court due to his failure to pay the sanctions.
15. LEGAL CONCLUSION: By failing to pay all or part of the $70,650.99 in sanctions within 30 days of the court’s January 23, 2001, order, Respondent failed to obey an order of the court, in wilful violation of Business and Professions Code section 6103.
COUNT THREE:
Business and Professions Code, section 6068(o)(3)
[Failure to Report Judicial Sanctions]
16. The allegations of paragraphs 1 through 9 and 12 through 14 are incorporated by reference.
17. Respondent was aware of the imposition of sanctions against him, but never reported the sanction order to the State Bar.
18. LEGAL CONCLUSION: By failing to report to the State Bar, in writing, within 30 days of the time Respondent had knowledge of the imposition of judicial sanctions against him, Respondent willfully violated Business and Professions Code, section 6068(o)(3).
COUNT FOUR:
Business and Professions Code, section 6068(m)
[Failure to Inform Client of Significant Development]
19. The allegations of paragraphs 1 through 9, 12 through 14, and 17 are incorporated by reference.
20. Scott was not present at the January 23, 2001, heating. Respondent later informed Scott that his action had been dismissed, but Respondent did not inform Scott that sanctions had been imposed against Respondent and Scott in the amount of $70,650.99.
21. On or about July 2, 2001, Respondent filed bankruptcy under Chapter 11 of the Bankruptcy Code.
22. On or about November 13, 2002, defendants filed a Writ of Execution (Money Judgment). On or about November 20, 2002, Scott received a Notice of Levy and learned of the sanction order for the first time. Defendants’ counsel also levied on Respondent, but was ordered by the bankruptcy court to release it.
23. On or about November 21, 2002, Scott and Scott’s wife, Debra wrote to Respondent to inform him of their receipt of the Notice of Levy. Scott also asked several questions as to the amount of the sanctions and informed Respondent that Scott was interested in contesting the sanction order.
24. On or about November 24, 2002, Scott and Respondent met to discuss the sanctions. At that meeting, Respondent informed Scott that Respondent was aware of the sanction order, but Respondent did not tell Scott why he failed to inform Scott of the order.
25. On or about November 24, 2002, Scott called Respondent on numerous occasions and left messages asking Respondent to contact Scott to discuss the sanction order. Respondent did not return Scott’s calls on that day.
26. On or about November 26, 2002, defendants’ counsel, in the case of Scott vs. Gallatin Corporation et al., case number BS057068, filed an Abstract of Judgment with the Los Angeles County Recorder.
27. On or about November 29, 2002, Respondent left a voice mail message for Scott in which he told Scott that Respondent would fax him three pages of exemptions to levies by 3:00 p.m. that day. Respondent did not send Scott a fax.
28. By on or about November 30, 2002, Scott had not received any communications from Respondent. Scott wrote another letter to Respondent that day in which Scott asked Respondent several questions about the sanctions, including how to vacate the judge’s order. Scott also asked for a copy of the order imposing sanctions. Respondent did not reply to Scott’s November 30, 2002, letter and has not communicated with Scott since Respondent left Scott the voice mail message on November 29, 2002.
29. Thereafter, Scott retained new counsel.
30. Beginning in or about February 2003, Scott’s bank account was debited $2,906.00 per month until approximately April 18, 2005, when the sanction order was paid in full to defendants counsel and the abstract of judgment was released.
31. LEGAL CONCLUSION: By failing to inform Scott of the January 23, 2001, sanction order, Respondent failed to keep a client reasonably informed of significant developments in a matter in which Respondent had agreed to provide legal services, in wilful violation of Business and Professions Code, section 6068(m).
PENDING PROCEEDINGS.
The disclosure date referred to, on page one, paragraph A.(7), was September 13, 2005.
AUTHORITIES SUPPORTING DISCIPLINE.
Standard 1.7(a) provides that if a respondent has a prior record of discipline, the discipline in the present proceeding shall be greater than that imposed in the prior proceeding.
Standard 2.6 provides that culpability of a member of a violation of [Business and Professions Code, sections 6068(m) and 6103] shall result in disbarment or suspension depending on the gravity of the offense or harm, if any, to the victim.
In In the Matter of Respondent Y (Review Dept. ! 998) 3 Cal. State Bar Ct. Rptr. 862, the attorney, who had no prior record of discipline, was privately reproved for failing to pay sanctions in the amount of $1,000 and for failing to report the imposition of those sanctions to the State Bar.
In In the Matter of Boyne (Review Dept. 1993) 2 Cal. State Bar Ct. Rptr. 389, the Review Department held that despite an attorney’s lack of money, he was culpable of misconduct for failing to pay court-ordered attorney fees to the opposing party, where the attorney knew of the order and failed to seek relief from it. The Boyne decision cited the case of Papdakis v. Zelis (1991) 230 Cal. App.3d 1385, 1389, which held that an attorney who sought bankruptcy court relief could not avoid payment of a court sanctions.
In the instant matter, as in Respondent Y, Respondent never sought relief from the order in the civil courts because of an inability to pay. Respondent Y held that even assuming the attorney lacked the ability to pay, it would not be a "defense" to the charged violation of section 6103.
The facts in the case at bar are more serious than those in Respondent Y and therefore a greater degree of discipline is warranted than that which was imposed in Respondent Y. Specifically, Respondent Y violated a single court order when he failed to pay sanctions in the amount of $1,000. Here, the Respondent violated four orders of the court to arbitrate his client’s matter, as well as the order of the court to pay sanctions within 30 days of the date of the order. Additionally, the amount of the sanctions in this matter - $70,650.99 - is much greater than the sanctions ordered in Respondent Y.
As such, two years stayed suspension is just and warranted.
SIGNATURE OF THE PARTIES
Case Number(s): 03-O-02690
In the Matter of: Douglas W. David
By their signatures below, the parties and their counsel, as applicable, signify their agreement with each of the recitation and each of the terms and conditions of this Stipulation Re Facts, Conclusions of Law and Disposition.
Signed by:
Respondent: Douglas W. Davis
Date: September 26, 2005
Respondent’s Counsel:
Date:
Deputy Trial Counsel: Lee Ann Kern
Date: September 29, 2005
Case Number(s): 03-O-02690
In the Matter of: Douglas W. David
Finding the stipulation to be fair to the parties and that it adequately protects the public, IT IS ORDERED that the requested dismissal of counts/charges, if any, is GRANTED without prejudice, and:
checked. The stipulated facts and disposition are APPROVED and the DISCIPLINE RECOMMENDED to the Supreme Court.
<<not>> checked. The stipulated facts and disposition are APPROVED AS MODIFIED as set forth below, and the DISCIPLINE IS RECOMMENDED to the Supreme Court.
<<not>> checked. All Hearing dates are vacated.
The parties are bound by the stipulation as approved unless: 1) a motion to withdraw or modify the stipulation, filed within 15 days after service of this order, is granted; or 2) this court modifies or further modifies the approved stipulation. (See rule 135(b), Rules of Procedure.) The effective date of this disposition is the effective date of the Supreme Court order herein, normally 30 days after the file date. (See rule 953(a), California Rules of Court.)
Signed by:
Judge of the State Bar Court: Robert M. Talcott
Date: September 30, 2005
[Rule 62(b); Rules Proc.; Code Civ. Proc., § 1013a(4)]
I am a Case Administrator of the State Bar Court of California. I am over the age of eighteen and not a party to the within proceeding. Pursuant to standard court practice, in the City and County of Los Angeles, on September 30, 2005, I deposited a true copy of the following document(s):
STIPULATION RE FACTS, CONCLUSIONS OF LAW AND DISPOSITION AND ORDER APPROVING STAYED SUSPENSION; NO ACTUAL SUSPENSION
in a sealed envelope for collection and mailing on that date as follows:
checked. by first-class mail, with postage thereon fully prepaid, through the United States Postal Service at Los Angeles, California, addressed as follows:
Douglas W. Davis
2811 Foose Rd
Malibu, CA 90265
checked. by interoffice mail through a facility regularly maintained by the State Bar of California addressed as follows:
LEE ANN KERN, Enforcement, Los Angeles
I hereby certify that the foregoing is true and correct. Executed in Los Angeles, California, on September 30, 2005.
Signed by:
Tammy R. Cleaver
Case Administrator
State Bar Court