Case Number(s): 09-O-14691-RAH and 10-O-02697-RAH
In the Matter of: Earl Wayne Husted III, Bar # 99019 , A Member of the State Bar of California, (Respondent).
Counsel For The State Bar: Larry DeSha,
Deputy Trial Counsel
1149 S. Hill Street
Los Angeles, CA 90015
(213) 765-1336
Bar # 117910
Counsel for Respondent: In Pro Per Respondent
Earl Wayne Husted III
P.O. Box 2070
Valley Center, CA 92082
(760) 749-5858
Bar # 99019
Submitted to: Settlement Judge
<<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 1, 1981.
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 11 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: three 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.) 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.
State Bar Court Case # 08-O-12311-RAP
Date prior discipline effective: October 29, 2009
Rules of Professional Conduct/State Bar Act
violations: Business and Professions Code sections 6068(k) and 6103
Degree of prior discipline: Actual suspension for 60 days
STIPULATION RE FACTS, CONCLUSIONS OF LAW AND DISPOSITION
IN THE MATTER OF: EARL WAYNE HUSTED III
CASE NOS.: 09-0-14691-RAH; 10-O-02697-RAH
WAIVER OF VARIANCE:
The parties waive any variance between the Notice of Disciplinary Charges filed on March 11, 2011 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.
FACTS FOR CASE NO. 09-0-14691-RAH:
1. On December 15, 2007, Howard Hanafin ("Howard") hired Respondent to mitigate or eliminate estate taxes which would otherwise be due upon his death. They agreed to a fixed fee of $15,000, with $7,000 paid immediately and $8,000 to be paid upon the completion of the services. Howard paid the $7,000 and instructed Respondent to make any future contacts with his son, Garry Hanafin.
2. Also on December 15, 2007, Garry Hanafin ("Garry") hired Respondent to obtain the probate court’s instructions for two trusts created by his mother. Garry was a cotrustee for one of the trusts and a beneficiary of the other. They agreed to a fixed fee of $6,000, with half paid immediately and the final amount of $3,000 due on or before the hearing date for the petition. Garry paid the first $3,000.
3. On December 21, 2007, Respondent filed a petition in probate court for instructions to the trustees of both trusts. The petition contained the instructions requested and had the attached written approvals of all trustees of both trusts. The probate court set a hearing for the petition for April 11, 2008. No interested parties filed any opposition to the petition.
4. On April 4, 2008, Garry sent Respondent the final payment of $3,000.
5. On April 11, 2008, the probate court approved the petition for instructions, on condition that Respondent file the written consents from all eight remainder beneficiaries. In November 2008, Respondent obtained the last consent but did not submit the consents and an order for the court’s signature until August 12, 2009, sixteen months after the court’s conditional approval. The order was approved and filed on September 24, 2009.
6. In August 2008, Respondent requested the additional payment of $8,000 for the tax mitigation matter, which Garry promptly paid. Respondent had then received the full payment of $21,000 for both cases, but had not completed either of them.
7. Respondent met with Garry on several occasions between August 2008 and March 2009. The tax mitigation matter was completed on March 25, 2009.
8. On June 3, 2009, Garry sent Respondent an e-mail requesting a status report on the trust instructions. On July 8, 2009, Garry sent Respondent a letter repeating the request for a status report. Respondent did not reply to either request until August 3, 2009.
9. Respondent sent Garry the probate court’s instructions for the two trusts in late September 2009, completing the legal services for that case.
CONCLUSIONS OF LAW FOR CASE NO. 09-0-14691-RAH:
10. Respondent failed to respond promptly to reasonable status inquiries made by Garry Hanafin on June 3, 2009 and July 8, 2009, and he thereby willfully violated section 6068(m) of the Business and Professions Code.
11. Respondent repeatedly or recklessly failed to perform legal services with competence by his failure to apply the diligence reasonably necessary for the completion of the trust instructions and the estate tax mitigation matters, and he thereby willfully violated rule 3-110(A) of the California Rules of Professional Conduct.
FACTS FOR CASE NO. 10-O-02697-RAH:
12. On September 29, 2009, the Supreme Court of Califomia issued disciplinary order S 175102, which imposed an actual suspension of Respondent for 60 days and until he paid disciplinary costs of $11,107. The effective date of the suspension was October 29, 2009. Respondent did not pay the costs, and his actual suspension continued until March 9, 2010, when the State Bar Court granted him extra time to pay the costs.
13. During the week of January 25, 2010, while still suspended, Respondent met with a client and gave him legal advice concerning governance of a corporation for which the client was a director and major shareholder. Respondent agreed to represent the client at a telephonic board of directors meeting on February 3, 2010, for an agenda including the purchase of the client’s shares of stock and changes of bylaws concerning the number of directors. Respondent did not inform the client of his actual suspension. (The client in this case is not identified because the client has not waived attorney/client privilege.)
14. On February 1, 2010, Respondent sent an e-mail to the corporation’s attorney, identifying himself as the attorney for his client and stating his intention to participate in the telephonic board meeting. On February 2, 2010, the corporation’s attorney informed Respondent’s client that Respondent was an inactive member of the State Bar. That same day, the client asked for an explanation and Respondent stated that it was an oversight by the State Bar. Respondent made an inquiry to the State
Bar that same day and was informed that he would remain suspended until his disciplinary costs were paid.
15. Respondent did no more work on the case, and he did not participate in the telephonic status conference on February 3, 2010. On February 10, 2010, Respondent filed a motion in State Bar Court for an extension of time to pay the disciplinary costs. On March 9, 2010, relief was granted and he was returned to active membership status.
16. On July 13, 2010, a State Bar investigator sent Respondent a letter requesting his written explanation to allegations that he had committed unauthorized practice of law while representing the client. The letter requested the written response no later than July 27, 2010. Respondent received the letter but did not reply.
17. On October 4, 2010, a State Bar investigator sent a second letter to Respondent, repeating the requests in the first letter, and requesting the written response no later than October 18, 2010. Respondent received the second letter but did not reply.
CONCLUSIONS OF LAW FOR CASE NO. 10-O-02697-RAH:
18. Respondent engaged in the unauthorized practice of law in violation of section 6125 of the Business and Professions Code by (1) his meeting with the client, giving legal advice, and agreeing to represent the client in the corporate governance matter, during the week of January 25, 2010, and by (2) his sending the e-mail on February 1, 2010 in which he identified himself as the client’s attorney and stated his intention to participate in the telephonic meeting of the board of directors On both occasions, Respondent held himself out as entitled to practice law, and he thereby violated section 6126 of the Business and Professions Code. His violations of sections 6125 and 6126 were failures to support the laws of the State of California, and he thereby willfully violated section 6068(a) of the Business and Professions Code.
19. Respondent failed to cooperate and participate in a disciplinary investigation when he failed to respond to the State Bar’s letters of July 13, 2010 and October 4, 2010, and he thereby willfully violated section 6068(i) of the Business and Professions Code.
DISMISSALS:
The State Bar respectfully requests the Court to dismiss Count Three in case no. 09-0-14691-RAH, which alleges a violation of rule 3-700(D)(1) of the Rules of Professional Conduct, and further requests dismissal of Count Five in case no. 10-O-02697-RAH, which alleges a violation of section 6106 of the Business and Professions Code. These dismissals are requested in the interests of justice.
SUPPORTING AUTHORITY:
Standards
Standard 1.7(a) requires that a second imposition of discipline shall be of greater degree than the first, with exceptions not applicable here.
Standard 1.7(b) requires disbarment for a third imposition of discipline unless the most compelling mitigating circumstances clearly predominate.
Standard 2.4(b) requires a reproval or suspension for willfully failing to perform services in an individual matter not demonstrating a pattern of misconduct, or for willfully failing to communicate with a client, depending upon the extent of the misconduct and the degree of harm to the client.
The standards are not binding upon the court and should not be followed in a talismanic fashion. See discussion in In re Silverton (2005) 36 Cal. 4th. 81, 91-92.
Case Law
In In the Matter of Layton (Review Dept. 1993) 2 Cal. State Bar Ct. Rptr. 366, attorney Layton was the executor and attorney for executor of a decedent’s estate. After the death of the testator, Layton moved without any appreciable delay and had the estate ready to settle within five months. He then delayed for one year in distributing the personal property, and then delayed another four years in selling the real property, distributing the proceeds, and closing the estate.
The Review Department found Layton culpable of one count of failing to perform legal services with competence, by his delay of five years to perform legal services which should have been completed in one year, and by his failure to keep the beneficiaries properly informed.
There were no mitigating factors and there were three aggravating factors. There was prior discipline of an actual suspension of 30 days for failure to perform in a probate case, for which Layton was removed as executor and attorney for executor. There was significant harm to the 12 beneficiaries, who had to wait an extra four years to get their inheritance, and there was indifference toward rectification and atonement.
The Review Department recommended an actual suspension of six months. The most significant factor in increasing the discipline beyond 60 days was the fact that both disciplines were for very similar cases. Layton exhibited "a disturbing lack of insight into the misconduct which in turn causes concern that he will repeat his misdeeds." ld., at 380.
Respondent here has a similar "disturbing lack of insight" due to the similarity of failure to perform legal services in his first and third episodes of misconduct. An increase of the actual suspension to one year is warranted here because this is Respondent’s third imposition of discipline, following a stayed suspension for 16 months and an actual suspension for 60 days.
PENDING PROCEEDINGS:
The disclosure date referred to on page 2, paragraph A.(7), was June 24, 2011.
COSTS:
Respondent acknowledges that the Office of the Chief Trial Counsel has informed Respondent that as of June 24, 2011, the costs in this matter are $4,161.00. 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.
Case Number(s): 09-O-14691-RAH; 10-O-02697-RAH
In the Matter of: Earl Wayne Husted III
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: Earl Wayne Husted III
Date: June 28, 2011
Respondent’s Counsel:
Date:
Deputy Trial Counsel: Larry DeSha
Date: July 1, 2011
Case Number(s): 09-O-14691-RAH and 10-O-02697-RAH
In the Matter of: Earl Wayne Husted III
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 5.58 (E) & (F), 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. Platel
Date: 7/12/11
[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 January 24, 2012, 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 Los Angeles, California, addressed as follows;
Earl Wayne Husted, III Esquire
PO Box 2070
Valley Center, California 92082
checked by interoffice mail through a facility regularly maintained by the State Bar of California addressed as follows:
Larry DeSha, Enforcement, Los Angeles
I hereby certify that the foregoing is true and correct. Executed in Los Angeles, California, on July 12, 2011.
Signed by:
Julieta E. Gonzales
Case Administrator
State Bar Court