Case Number(s): 07-O-11227 & 08-O-13364-DFM
In the Matter of: David Robert Baade, Bar # 46509, A Member of the State Bar of California, (Respondent).
Counsel For The State Bar: Jean Cha, Bar #228137,
Counsel for Respondent: In Pro Per, Bar #,
Submitted to: Settlement Judge – State Bar Court Clerk’s Office Los Angeles.
<<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 June 26, 1970.
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 15 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):
<<not>> 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.
checked. Costs are to be paid in equal amounts prior to February 1 for the following membership years: Two billing cycles following the effective date of the Supreme Court Order. (Hardship, special circumstances or other good cause per rule 5.132, Rules of Procedure.) .
<<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: DAVID ROBERT BAADE, State Bar No. 46509
STATE BAR COURT CASE NUMBER: 07-O-11227 & 08-O-13364
Facts Case No. 07-O-11227
1. From about August 7, 1981, to and including February 15, 2007, Respondent was the authorized signatory for his client trust account at Union Bank of California (Bank), identified as account number xxxxxx9612.
2. During that aforementioned period, Respondent was also an authorized signatory for his law office’s general bank account at California Bank & Trust, identified as account number xxxxxx2097.
3. From November 3, 2006 until January 2, 2007, Respondent, on fourteen occasions deposited non entrusted funds into his Client Trust Account (CTA).
4. On December 29, 2006, Respondent’s CTA check number 2988, issued for the amount of $1,300, was presented for payment while Respondent’s CTA balance was negative. On January 2, 2007, the Bank paid Respondent’s CTA check number 2988, despite the insufficient funds in the CTA Respondent knew or was grossly negligent in not knowing that the funds in his CTA were insufficient or would become insufficient to pay that check number 2988, at the time the check was issued or by the time of its presentment.
5. On December 29, 2006, Respondent’s CTA check number 2990, issued for the amount of $2,800, was presented for payment while Respondents CTA balance was negative. On January 2, 2007, the Bank returned Respondent’s CTA check number 2990 as unpaid, due to insufficient funds in the CTA. On January 5, 2007, Respondent’s CTA check number 2990, issued for the amount of $2,800, was presented for payment while Respondents CTA balance was negative. On January 8, 2007, the Bank returned Respondent’s CTA check number 2990 as unpaid, due to insufficient funds in the CTA. Respondent knew or was grossly negligent in not knowing that the funds in his CTA were insufficient or would become insufficient to pay check number 2990, at the time the check was issued or by the time of its presentment.
6. On January 8, 2007, Respondent’s general account check number 5280 and check number 5281, which he had deposited into his CTA, was returned as unpaid by California Bank & Trust, as a result of insufficient funds in Respondent’s general account. Respondent knew or was grossly negligent in not knowing that the funds in his general account were insufficient or would become insufficient to pay check number 5280 and check number 5281, at the time the check was issued or by the time of its presentment.
7. On January 16, 2007, Respondent’s general account check numbers 5280 and 5281, totaling $3,050, were returned as unpaid by California Bank & Trust.
8. On February 15, 2007, Respondent’s CTA was closed, due to return-item activity.
9. As a result of the return-item activity related to his bank accounts, Respondent owed the Bank $1,848.61 on February 15, 2007.
Facts Case No. 08-O-13364
10. On September 12, 2006, Dawn N. Shade (Shade) employed Respondent to represent Shade in her marriage dissolution action.
11. On February 5, 2008, Shade terminated Respondent’s employment.
12. By Respondent’s billing statement issued to Shade dated February 15, 2008, there was a credit balance in the amount of $522.20 as of February 5, 2008.
13. On February 27, 2008, a substitution of counsel form was filed in Shade’s case, removing Respondent as Shade’s attorney of record.
14. By a letter dated April 28, 2008, and addressed to Respondent, Shade disputed Respondent’s fees and requested that any credit balance be refunded to her.
15. On June 23, 2009, Respondent issued check number 6747, in the amount of $522.20, to Dawn Shade and drawn against Respondent’s general account (the refund check), which Shade received.
16. On July 1, 2009, Ms. Shade presented that refund check to California Bank & Trust for payment, in person. On July 1, 2009, California Bank & Trust refused to honor the refund check because of insufficient funds in Respondent’s general account. Respondent knew or was grossly negligent in not knowing that the funds in his general account were insufficient or would become insufficient to pay that check number 6747, at the time the check was issued or by the time of its presentment.
17. On July 9, 2009, Shade returned to the bank and presented the check again, this time it was honored.
Conclusions of Law
18. By depositing funds not belonging to any client into Respondent’s CTA from November 3, 2006, to and including January 2, 2007, Respondent commingled funds belonging to him or his law firm in a trust account, in willful violation of rule 4-100(A) of the California Rules of Professional Conduct.
19. By repeatedly issuing checks drawn against insufficient funds in his CTA and by repeatedly issuing checks drawn against insufficient funds in his general account, while Respondent knew or was grossly negligent in not knowing that the funds in those accounts were insufficient or would become insufficient to pay those checks, either at the time such checks were issued or by the time of presentment, Respondent willfully committed an act or acts involving moral turpitude, dishonesty, or corruption, in willful violation of California Business and Professions Code section 6106.
20. By failing to promptly refund the $522.20 in unearned fees to Shade, after Respondent’s employment had terminated by February 27, 2008, Respondent willfully violated rule 3-700(D)(2) of the California Rules of Professional Conduct.
Other Circumstances
In November 2006, Respondent recognized that the funds in his CTA were not sufficient to cover upcoming disbursements. He made deposits into his CTA to replenish missing funds without verifying the exact amounts he should deposit. This conduct ultimately caused the insufficient funds checks. However, the CTA deficiencies were not caused by any deliberate conversion of the funds by Respondent. Here, the lack of an evil intent .does not immunize the attorney’s conduct from a finding of moral turpitude. (Fitzsimmons v. State Bar (1983) 34 Cal.3d 327, 331.)
Aggravation
Respondent has a prior record of discipline. In 1996, Respondent was privately reproved for failing to communicate significant developments to his client regarding the court’s order striking his client’s answer and cross-complaint and additional monetary sanctions and discovery sanctions which Respondent paid but failed to inform his client. However, the misconduct in Respondent’s prior was almost 17 years ago. The discipline is given diminished aggravating weight as it was many years ago and did not involve clients or client funds. (Std. 1.2(b)(i).)
Mitigation
Respondent has participated in pro bono work in his community for the past several years which is a factor in mitigation. (Rose v. State Bar (1989) 49 Cal.3d 646, 667; In the Matter of Spaith (Review Dept. 1996) 3 Cal.State Bar Ct. Rptr. 511,521.)
Respondent has been candid and cooperative. (Std. 1.2(e)(v); Silva-Vidor v. State Bar (1989) 49 Cal.3d 1071, 1079; Pineda v. State Bar (1989) 49 Cal.3d 753,760.)
Respondent has provided two character reference letters from an attorney and a nonprofit charity where Respondent had volunteered many hours of service. (Std. 1.2(e)(vi).) These letters attested to his character, integrity and honesty even with the knowledge of the misconduct and believe that the conduct was due to his extenuating circumstance and error and will not recur. (Std. 1.2(e)(vi).)
AUTHORITIES SUPPORTING DISCIPLINE.
The purposes of imposing sanctions for professional misconduct are the protection of the public, the courts and the legal profession; the maintenance of high professional standards by attorneys; and the preservation of public confidence in the legal profession. (Std. 1.3; In re Morse (1995) l 1 Cal.4th 184, 205, Std. 1.3; Tarver v. State Bar (1984) 37 Cal.3d 122, 133,207 Cal.Rptr. 302, 688 P.2d 911; Chadwick v. State Bar (1989) 49 Cal.3d 103, 111 .) In order to properly fulfill the purposes of lawyer discipline, we must review the nature and extent of the facts and circumstances surrounding the misconduct. The determination of discipline involves an analysis of the standards and on balance with any mitigation and aggravation. (Std. 1.6(b). Segal v. State Bar (1988) 44 Cal.3d 1077, 1089; Snyder v. State Bar (1990) 49 Cal.3d 1302, 1310-11.)
Standard 2.2(b) provides that culpability of a member of commingling funds not resulting in the willful misappropriation of entrusted funds shall result in at least a three-month actual suspension from the practice of law, irrespective of mitigating circumstances.
Standard 2.3 provides that misconduct involving moral turpitude, fraud, or intentional dishonesty toward a client or of concealment of material fact to a client, shall result in actual suspension or disbarment, depending upon the extent to which the victim of the misconduct is harmed or misled and depending upon the magnitude of the act of misconduct and the degree to which it relates to the member’ s acts within the practice of law.
Standard 2.10 provides that a violation of any Rules of Professional Conduct not specified in the standards shall result in reproval or suspension, according to the gravity of the offense or harm to any victim, with due regard to the purposes set forth in standard 1.3.
In In the Matter of McKiernan (Review Dept. 1995) 3 Cal. State Bar Ct. Rptr. 420, an attorney received two years stayed suspension two years probation with 90 days actual suspension, where his misconduct in a single matter involved repeated misuse and neglect of his client trust account, and his issuance of two checks when he knew that there were insufficient funds to cover them.
The attorney in McKiernan had no prior discipline, however the period of the CTA misconduct in McKiernan was lengthier.
The purpose of CTA rules is to provide against the dangers related to commingling of personal funds with client funds which could result in the loss of client money. (Hamilton v. State Bar (1979) 23 Cal.3d 868, 876.) The rule is violated merely by an attorney’s failure to deposit and manage trust
account money in the manner designated by the rule. (Vaughn v. State Bar (1972) 6 Cal.3d 847, 858.) An attorney is expected to take reasonable care to comply with the crucially important rules for the safeguarding and allocation of client funds. (Palomo v. State Bar (1984) 36 Cal.3d 785, 795.)
Here, Respondent unreasonably issued checks before having confirmation that the incoming funds had cleared. At best, Respondent’s actions were the result of his gross negligence and therefore involved moral turpitude. (In the Matter of Hagen (Review Dept. 1992) 2 Cal. State Bar Ct. Rptr. 153, 169.)
DISMISSALS.
The parties respectfully request the Court dismiss two alleged violations in the interest of justice:
Case No.: 08-O-13364, Count: Three, Alleged Violation: Rules of Professional Conduct, rule 3-100(A)
Case No.: 08-O-13364, Count: Four, Alleged Violation: Business and Professions Code, section 6068(m)
Case No.: 08-O-13364, Count: Five, Alleged Violation: Business and Professions Code, section 6106
WAIVER OF VARIANCE BETWEEN NOTICE OF DISCIPLINARY CHARGES AND
STIPULATED FACTS AND CULPABILITY.
The parties waive any variance between the Notice of Disciplinary Charges filed on December 4, 2008 and the facts and/or conclusions of law contained in this stipulation. Additionally, the parties waive the issuance of an amended Notice of Disciplinary Charges. The parties further waive the right to the filing of a notice of Disciplinary Charges and to a formal hearing on any charge not included in the pending Notice of Disciplinary Charges.
PENDING PROCEEDINGS.
The disclosure date referred to, on page one, paragraph A.(7), was November 24, 2009.
COSTS OF DISCIPLINARY PROCEEDINGS.
Respondent acknowledges that the Office of the Chief Trial Counsel has informed Respondent that as of November 24, 2009, the estimated prosecution costs in this matter are approximately $3,654.00. Respondent acknowledges that this figure is an estimate only and that it might not include State Bar Court costs that will be included in any final cost assessment (see Bus. & Prof. Code section 6068.10(c)) or taxable costs (see C.C.P. section 1033.5(a)), which will be included in any final cost assessment. 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. It is also noted that if Respondent fails to pay any installment of disciplinary costs within the time provided herein or as may be modified by the State Bar Court pursuant to section 6086.10, subdivision(c), the remaining balance of the costs is due and payable immediately unless relief has been granted under the Rules of Procedure of the State Bar of California (Rules Proc. of State Bar, rule 286). The payment of costs is enforceable both as provided in Business and Professions Code section 6140.7 and as a money judgment.
Case Number(s): 07-O-11227 & 08-O-13364
In the Matter of: David Robert Baade
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.
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.
Case Number(s): 07-O-11227 & 08-O-13364
In the Matter of: David Robert Baade
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: David Robert Baade
Date: December 1, 2009
Respondent’s Counsel:
Date:
Deputy Trial Counsel: Jean Cha
Date: December 2, 2009
Case Number(s): 07-O-11227 & 08-O-13364
In the Matter of: David Robert Baade
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 9.18(a), California Rules of Court.)
Signed by:
Judge of the State Bar Court: Richard A. Honn
Date: December 14, 2009
[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 Los Angeles, on December 17, 2009, I deposited a true copy of the following document(s):
STIPULATION RE FACTS, CONCLUSIONS OF LAW AND DISPOSITION AND ORDER APPROVING 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:
DAVID ROBERT BAADE
LAW OFC DAVID R BAADE
2151 MICHELSON DR #105
IRVINE, CA 92612
<<not>> checked. by interoffice mail through a facility regularly maintained by the State Bar of California addressed as follows:
JEAN CHA, Enforcement, Los Angeles
I hereby certify that the foregoing is true and correct. Executed in Los Angeles, California, on December 17, 2009.
Signed by:
Tammy Cleaver
Case Administrator
State Bar Court