Case Number(s): 06-O-13305; 07-O-10449
In the Matter of: Kim Mallory, Bar # 159870, A Member of the State Bar of California, (Respondent).
Counsel For The State Bar: Robin Brune, Bar #149481,
Counsel for Respondent: Carol Langford, Bar # 124812,
Submitted to: Settlement Judge – State Bar Court Clerk’s Office San Francisco.
<<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 October 2, 1992.
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 13 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. Until costs are paid in full, Respondent will remain actually suspended from the practice of law unless relief is obtained per rule 5.130, Rules of Procedure.
<<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.
IN THE MATTER OF: Kim Mallory, State Bar No. 159870
STATE BAR COURT CASE NUMBER: 06-O-13305; 07-O-10449
FACTS AND CONCLUSIONS OF LAW.
Case no. 06-O-13305
At all times pertinent to these charges, respondent maintained an attorney-client trust account, account number 1791794XXX, at Washington Mutual Bank (hereinafter, CTA account). On May 2, 2006, respondent received the sum of $1,500 from George Hills, Co. on behalf of her client, Horton. Respondent deposited these funds into her CTA account.
On May 3, 2006, respondent withdrew $500.00 from her trust account as her fee in the Horton matter. After subtracting respondent’s $500 contingency fee from the Horton settlement funds, respondent was required to maintain in her trust account the Sum of $1000 on behalf of Horton. On May 5, 2006, the balance in respondent’s trust account dropped to $336.38. None of the expenditures made between May 3, and May 5, 2006, were made to Horton or on behalf of Horton.
On May 3, 2006 through May 6, 2006, respondent issued six checks from her trust account issued to payees including Washington Mutual Bank, AT&T, PG&E, Providian, and Capitol One. These expenditures totaled $2,212,66 and were for respondent’s own purposes, and not related to the client Horton or any other client matter.
On May 5, 2006, respondent deposited one check for $1,000 from Pivotal Point Youth Services into her trust account. This check from Pivotal Point Youth Services was for an advanced or retainer fee for respondent’s services. Thereafter, respondent issued three checks for personal expenses to Capitol One, Washington Mutual, and a credit card. The total amount of the three checks was $1,828.00. Respondent issued an additional check to herself, check number 7748, dated 5/11/06, in the sum of $300.00. Respondent states this amount was for earned fees.
The three checks respondent issued on May 5, 2006 and the check respondent issued on May 11, 2006 were returned by the bank due to insufficient funds.
At the time respondent issued the three checks on May 5, 2006, she was relying on the deposited one check for $1,000 from Pivotal Point Youth Services, dated May 5, 2006, to cover the costs of the checks she issued. However, respondent did not wait for the Pivotal Point Youth Services check to clear the bank. In fact, the Pivotal Point Youth Services Check was dishonored due to insufficient funds.
Between March 14, 2006 and May 15, 3006, respondent issued an additional eight checks from her CTA account for personal expenses unrelated to client matters, from her trust account, for a total sum of $1,155.00.
At the time she issued these checks, respondent did not have a separate business account, because of her bad credit history. She therefore used her trust account as a personal or business account. Respondent left personal funds in her trust account to cover her personal expenses.
Conclusions of Law
By failing to maintain at least $1,000 received on behalf of Horton in her trust account, respondent wilfully failed to maintain client funds in a trust account, in violation of Rules of Professional Conduct, rule 4-100(A).
By misappropriating at least $664.00 of Horton’s settlement funds for her own purposes, respondent committed an act involving moral turpitude, dishonesty, or corruption, in wilful violation of Business and Professions Code, section 6106.
By paying personal expenses from her trust account, respondent commingled funds belonging to respondent with client funds in her client trust account, in wilful violation of Rules of Professional Conduct, rule 4-100(A).
By relying on the Pivotal Point Youth Services check to cover to cover the checks she issued, before waiting for the Pivotal Point Youth Services check to clear; and by using her trust account as a business account due to her poor credit, respondent committed acts involving moral turpitude, dishonesty, or corruption, in wilful violation of Business and Professions Code, section 6106.
Case no. 07-O-10449
Commencing in or about 2003, Mr. Whitehurst was a member of an organization entitled Americans With Disabilities Advocates (AWDA), and agreed to be a plaintiff, on behalf of the AWDA, in several lawsuits alleging failure to comply with disability access. The AWDA hired respondent to bring several suits on their behalf. Whitehurst and was a named plaintiff in at least twenty-four suits that were brought in his name and on behalf of the AWDA. The AWDA was a plaintiff in at least eighty different suits. As to the twenty-four suits in which Whitehurst was a named plaintiff, respondent, at the very least, owed fiduciary duties to Whitehurst.
On December 4, 2006, Whitehurst made a complaint to the State Bar, requesting an accounting of all settlement monies acquired in the suits that were brought in his name. In response to the request for an. accounting, respondent provided the State Bar with a list of twenty-four settled cases with an accounting of how much money was paid, in each case, to Whitehurst. However, respondent was unable to trace or identify these funds in her CTA account, nor was she able to verify and confirm all monies she states she paid to Whitehurst. Whitehurst acknowledges he received between $60,000 and $70,000 in settlement monies from the disability access lawsuits.
Conclusions of Law
By failing to provide a complete response to Whitehurst’s request for an accounting, and by being unable to verify and confirm all monies she states she paid to Whitehurst, respondent failed to maintain complete records of all funds of Whitehurst coming into her possession, and failed to render appropriate accounts to the client regarding them, in willful violation of Rules of Professional Conduct, rule 4-100(B)(3).
PENDING PROCEEDINGS.
The disclosure date referred to, on page 2, paragraph A(6), was December 8, 2009.
COSTS OF DISCIPLINARY PROCEEDINGS.
Respondent acknowledges that the Office of the Chief Trial Counsel has informed respondent that as of December 8, 2009, the prosecution costs in this matter are $2,602. Respondent further acknowledges that should this stipulation be rejected or should relief from the stipulation be granted, the costs in this matter may increase due to the cost of further proceedings.
AUTHORITIES SUPPORTING DISCIPLINE.
The Standards call for a one year suspension for violations of Rule 4-100(A) of the Rules of Professional Conduct, irrespective of mitigating circumstance, s.(Standard 2.2(b)).
Case law calls for significant suspension under these Circumstances. In re Mapps (Review Dept. 1990) 1 Cal State Bar Ct. Rptr. 1; In the Matter of Heiser (Review Dept. 1990) 1 Cal. State Bar Ct. Rptr. 47; Lawhorn v. State Bar (1987) 43 Cal.3d. 1357; Kelly v. State Bar (1991) 53 Cal.3d. 509.
In Mapps, the attorney misappropriated $5,700 of medical liens and repaid the funds prior to the institution of disciplinary proceedings. He had no prior record of discipline and was admitted for seven years at the time of misconduct. In addition to the misappropriation, he issued checks from insufficient funds to two different clients. He was suspended for two years. "Writing bad checks may, by itself under some circumstances, constitute moral turpitude." Mapps, supra, 1 Cal.State Bar Ct. Rptr. 1, at 11.
In Heiser, the attorney issued seven checks for personal expenses on closed CTA accounts and personal checking accounts, for a total sum of $5,428.00. He had 102 NSF checks total, and received two years of suspension, stayed, with six months actual suspension. Unlike Heiser, respondent in this case has prior discipline. Heiser was admitted in 1973 and had no prior discipline until the misconduct in 1990.
In Lawhorn, the attorney received two years of actual suspension for misappropriating $1,355.75.
In Kelly, the attorney received three years stayed, three years probation, with 120 days actual suspension for misappropriating $750.00. Unlike respondent, Kelly had no prior discipline.
AGGRAVATING CIRCUMSTANCES.
Standard 1.2(b)(ii) multiple acts of misconduct
PRIOR DISCIPLINE.
Respondent was disciplined in 2003, case no. 00-O-11487, with a private reproval for trust account violations. At that time, she stipulated to commingling personal and client funds in her CTA and issuing checks from her CTA to cover personal expenses, in violation of Rule 4-100(A) of the Rules of Professional Conduct. The conduct occurred in 1999.
FACTS SUPPORTING AGGRAVATING CIRCUMSTANCES.
Respondent has committed numerous trust account violations.
MITIGATING CIRCUMSTANCES.
Standard 1.2(e)(v) candor and cooperation
FACTS SUPPORTING MITIGATING CIRCUMSTANCES.
Respondent has been cooperative in reaching a stipulation in his matter.
STATE BAR ETHICS SCHOOL.
Because respondent has agreed to attend State Bar Ethics School as part of this stipulation, respondent may receive Minimum Continuing Legal Education credit upon the satisfactory completion of State Bar Ethics School.
Respondent admits that the aforementioned facts are true and that she is culpable of violations of the specified statutes and/or Rules of Professional Conduct.
Case Number(s): 06-O-13305; 07-O-10449
In the Matter of: Kim Mallory
a. Restitution
<<not>> 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:
Principal Amount:
Interest Accrues From:
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 .
<<not>> 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)
Minimum Payment Amount
Payment Frequency
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.
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.
SIGNATURE OF THE PARTIES
Case Number(s): 06-O-13305; 07-O-10449
In the Matter of: Kim Mallory
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: Kim Mallory
Date: December 11, 2009
Respondent’s Counsel: Carol Langford
Date: December 15, 2009
Deputy Trial Counsel: Robin Brune
Date: December 17, 2009
Case Number(s): 06-O-13305; 07-O-10449
In the Matter of: Kim Mallory
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:
<<not>> checked. The stipulated facts and disposition are APPROVED and the DISCIPLINE RECOMMENDED to the Supreme Court.
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 stipulation is modified as follows:
1. On page 4, paragraph E(1), the "X" in the box is deleted.
2. On page 5, paragraph E(10), an "X" is inserted in the box preceding the words "The following conditions are attached .... "
3. On page 5, paragraph F(2), an "X" is inserted in the box.
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 9.18(a), California Rules of Court.)
Signed by:
Judge of the State Bar Court: George Scott
Date: January 4, 2010
[Rules Proc. of State Bar; Rule 5.27(B); 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 San Francisco, on January, I deposited a true copy of the following document(s):
STIPULATION RE FACTS, CONCLUSIONS OF LAW AND DISPOSITION AND ORDER APPROVING
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 San Francisco, California, addressed as follows:
CAROL LANGFORD
100 PRINGLE AVE #570
WALNUT CREEK, CA 94596
<<not>> checked. by certified mail, No. , with return receipt requested, through the United States Postal Service at , California, addressed as follows:
<<not>> checked. by overnight mail at , California, addressed as follows:
<<not>> checked. by fax transmission, at fax number . No error was reported by the fax machine that I used.
<<not>> checked. By personal service by leaving the documents in a sealed envelope or package clearly labeled to identify the attorney being served with a receptionist or a person having charge of the attorney’s office, addressed as follows:
checked. by interoffice mail through a facility regularly maintained by the State Bar of California addressed as follows:
ROBIN BRUNE, Enforcement, San Francisco
I hereby certify that the foregoing is true and correct. Executed in San Francisco, California, on January 5, 2010.
Signed by:
Bernadette C. O. Molina
Case Administrator
State Bar Court