Case Number(s): 09-O-16183; 10-O-07527
In the Matter of: James William Biedebach Bar #152980 , A Member of the State Bar of California, (Respondent).
Counsel For The State Bar: Dane C. Dauphine, Supervising Trial Counsel
1149 South Hill St.
Los Angeles, CA 90015-2299
(213) 765-1293
Bar #121606
Counsel for Respondent: Susan L. Margolis Margolis & Margolis LLP
2000 Riverside Dr.
Los Angeles, CA 90039-3758
(323) 953-8996
Bar #104629
Submitted to: Assigned 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 June 10, 1991.
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):
<<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.
<<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.
Checked. (3) Candor/Cooperation: Respondent displayed spontaneous candor and cooperation with the victims of his/her misconduct and to the State Bar during disciplinary investigation and proceedings. Respondent displayed candor and cooperation and a willingness to accept punishment and rehabilitate himself by entering into a comprehensive stipulation as to facts and culpability at the outset of the
proceedings, thus saving the State Bar time and resources. This is also deserving of significant mitigation credit. In the Matter of Dale (Review Dept. 2005) 4 Cal. State Bar Ct.Rptr. 798, 81 I; In the Matter of Johnson (Review Dept. 2000) 4 Cal. State Bar Ct.Rptr. 179, 190.
Checked. (8) Emotional/Physical Difficulties: At the time of the stipulated act or acts of professional misconduct Respondent suffered extreme emotional difficulties or physical disabilities which expert testimony would establish was directly responsible for the misconduct. The difficulties or disabilities were not the product of any illegal conduct by the member, such as illegal drug or substance abuse, and Respondent no longer suffers from such difficulties or disabilities. The difficulties or disabilities were not the product of any illegal conduct by the member, such as illegal drug or substance abuse, and Respondent no longer suffers from such difficulties or disabilities. During the relevant time period, Respondent suffered a series of extreme emotional and financial difficulties that resulted from circumstances beyond his control, which heavily mitigated the violations alleged. Those difficulties included financial reversals in connection with law partnerships he was involved with, the downturn in the economy and attendant drop in business, clients defaulting on their bills, divorce proceedings, and family support obligations which overtaxed his financial resources. Standard ] .2(e) (iv}
Checked. (9) Severe Financial Stress: At the time of the misconduct, Respondent suffered from severe financial stress which resulted from circumstances not reasonably foreseeable or which were beyond his/her control and which were directly responsible for the misconduct. During the relevant time period, Respondent suffered a series of extreme emotional and financial difficulties that resulted from circumstances beyond his control, which heavily mitigated the violations alleged. Those difficulties included financial reversals in connection with law partnerships he was involved with, the downturn in the economy and attendant drop in business, clients defaulting on their bills, divorce proceedings, and family support obligations which overtaxed his financial resources. Standard | .2(e) (iv)
Checked. (5) Other Conditions: Within one (1) year of the effective date of the discipline herein, Respondent must submit to the Office of Probation satisfactory evidence of completion of no less than 6 hours of Minimum Continuing Legal Education (MCLE) approved courses in general legal ethics. This requirement is separate from any MCLE requirement, and Respondent will not receive MCLE credit for attending these courses. (Rule 3201, Rules of Procedure of the State
Bar.)
Case Number(s): 09-o-16183; 10-O-07527
In the Matter of: James William Biedebach
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.
IN THE MATTER OF: James William Biedebach, no. 152980
CASE NUMBER(S): 09-O-16183, 10-O-07527
FACTS AND CONCLUSIONS OF LAW.
Respondent admits that the following facts are tree and that he is culpable of violations of the specified statutes and/or Rules of Professional Conduct.
Case No. 09-O-16183 (Complainant: Philip Schaefer)
FACTS:
1. In and before July 2008, Respondent was representing DJM Construction, Inc., ("DJM") and TSJ Electrical & Telecommunications dba Master’s Electric ("Master’s Electric") in their civil action pending against the Centralia School District in the Orange County Superior Court, case no. 07CC07654
("DJM Construction case").
2. When Respondent began representing DJM and Master’s Electric, he was a partner at the law firm of Covington & Crowe. When Respondent left the law firm, his law office became counsel for the clients. The clients had agreed to compensate the law firm for legal services by paying an hourly fee, and this arrangement continued after Respondent left the law firm.
3. On July 21, 2008, the parties in the DJM Construction case reached a settlement during mediation by which the defendant agreed to pay the plaintiffs $142,500. Respondent recalls that the President of Masters Electric agreed to settle for that amount in exchange for Respondent’s agreement to cap total attorney’s fees at $30,000. That officer recalls that Respondent had estimated his remaining fees as $30,000 to aid the client in deciding on a settlement.
4. Respondent thereafter received on behalf of DJM and Master’s Electric a check for
$142,500. On August 12, 2008, Respondent deposited the $142,500 in a client trust account at Citizens Business Bank ("the CTA").
5. On August 18, 20, and 28, 2008, Respondent disbursed from the CTA a total of $30,000 of the funds received on behalf of DJM and Master’s Electric as payment to himself and to Covington & Crowe for attorney’s fees. Respondent believed that Master’s Electric had agreed to pay that sum in fees during his discussion at the settlement conference with the President of the company.
6. On August 21, 2008, Respondent disbursed fi’om the CTA $100,000 of the funds received on behalf of DJM and Master’s Electric to Master’s Electric.
7. On September 16, 2008, the office manager for Master’s Electric sent an email to
Respondent requesting that he provide an accounting for the $30,000 in fees he was withholding from the settlement funds. Respondent received the email and responded to say that he would talk to the President of the company about the matter.
8. Respondent was required to maintain $12,500 in the CTA on behalf of DJM and Master’s Electric. On October 31,2008, the balance in the CTA was $171.14. Respondent transferred approximately $12,328.86 o f the funds received on behalf of DJM and Master’ s Electric to another account to pay personal or office expenses.
9. On December 3, 2008, Respondent sent an email to the office manager for Master’s Electric stating that he would send a final billing for his fees by on or about December 8, 2008. On or about December 8, 2008, the President of Master’s Electric responded to Respondent’s email informing Respondent that his failure to disburse all funds to Master’s Electric had led the company to hire legal counsel to pursue the matter. Respondent did not provide Master’s Electric with a billing for his fees in
December 2008.
10. On February 5, 2009, February 17, 2009, and March 9, 2009, Michael S. Orr, new counsel for Master’s Electric, sent letters to Respondent by fax and by mail to Respondent’s law office address requesting that Respondent immediately disburse all funds being held on behalf of Master’s Electric along with an accounting for Respondent’s fees and costs. Respondent received the letters.
11. On February 11, 2009, Respondent disbursed $12,500 from the CTA to Master’s Electric. Respondent did not provide an accounting for his fees at that time.
12. In July 2009, the President of Master’s Electric complained to the State Bar about
Respondent’s failure to account for his fees. Respondent did not provide an accounting for his fees and costs until February 2011 after a request by the State Bar that he do so.
CONCLUSIONS OF LAW:
13. By not maintaining $12,500 of Master Electric’s funds in the CTA until disbursed at the direction of Master Electric, Respondent failed to maintain the balance of funds received for the benefit of a client and deposited in a trust account in willful violation of rule 4-100(A), Rules of Professional Conduct.
14. By misappropriating approximately $12,328.86 of the funds received on behalf of Master’s Electric, Respondent committed an act involving moral turpitude, dishonesty or corruption in willful violation of section 6106, Business and Professions Code.
15. By not providing Master’s Electric promptly upon its request with an accounting of the fees he had taken from the funds received in settlement of the DJM Construction case, Respondent failed to render appropriate accounts to a client regarding all funds coming into Respondent’s possession in willful violation of rule 4-100(B)(3), Rules of Professional Conduct.
Case No. 10-O-07527 (Complainant: Adeline Ochoa)
FACTS:
16. In or about July 2007, Adeline Ochoa ("Ochoa") employed Respondent to represent her in a personal injury claim arising from an automobile accident in June 2007. In the Fall of 2009, Ochoa agreed to a settlement of her claim for the sum of $100,000.
17. In October 2009, Respondent wrote to Medicare to inquire whether it had a lien on Ochoa’s case.
18. In November 2009, Respondent received a check from an insurer for a settlement funds, and Ochoa endorsed it for deposit.
19. On November 24, 2009, Respondent deposited the $100,000 received on behalf of Ochoa in a client trust account at Citizens Business Bank ("the CTA"). On that same date, Respondent disbursed $33,333.33 to himself in payment of his fees. Thereafter, Respondent was required to maintain $66,666.67 of Ochoa’s funds in Respondent’s CTA until disbursed to, or on behalf of, Ochoa. There was a medical lien on Ochoa’s settlement funds.
20. In January 2010, Respondent received a letter from Medicare asking that he complete a questionnaire to provide information about Ochoa’s case. He did so.
21. Prior to disbursing the remaining funds received on behalf of Ochoa to her or to pay medical liens on her behalf, Respondent instead made a number of transfers of funds from Respondent’s CTA to his business checking account, reducing the balance over time. On December 31, 2009, the balance in the CTA was $41,794.69. On January 31, 2009, the balance in the CTA was $6,779.04. On February 26, 2009, the balance in the CTA was $753.60. Respondent took Ochoa’s funds for his own use.
22. In May 2010, Respondent received telephonic confirmation from Medicare that it was not asserting a lien in Ochoa’s case. By letter dated May 17, 2010, Respondent provided Ochoa with a proposed disbursement of her funds showing that with a reduction for his fees and a medical lien of $23,134.75, she would receive $43,531.92, and he asked that she provide a notarized signature approving the breakdown. On May 19, 2010, Ochoa signed the disbursement and had her signature notarized. On May 20, 2010, Ochoa returned the signed disbursement proposal to Respondent by overnight mail. On June 29, 2010, Ochoa made a complaint to the State Bar when she still had not received her funds.
23. Respondent did not receive written confirmation from Medicare that it was not asserting a lien until July 2010.
24. On June 30, 2010, prior to any contact by the State Bar, Respondent transferred $43,500 from his business checking account to the CTA and issued a check to Ochoa in the sum of $43,531.91 which Ochoa promptly negotiated. On September 15, 2010, Respondent disbursed $15,423.18 from the CTA to a medical provider to satisfy its lien on Ochoa’s settlement. On October 1, 2010, Respondent sent a letter to Ochoa informing her of the payment of the medical lien and enclosing a check drawn
upon the CTA to Ochoa for the remaining $7,711.57. Ochoa promptly negotiated the check and received her remaining funds.
CONCLUSIONS OF LAW:
25. By not maintaining $66,666.67 of Ochoa’s funds in the CTA until disbursed at the direction of Ochoa, Respondent failed to maintain the balance of funds received for the benefit of a client and deposited in a trust account in willful violation of rule 4-100(A),
Rules of Professional Conduct.
26. By misappropriating approximately $65,913.07 of the funds received on behalf of Ochoa, Respondent committed an act involving moral turpitude, dishonesty or corruption in willful violation of section 6106, Business and Professions Code.
PENDING PROCEEDINGS.
The disclosure date referred to, on page 2, paragraph A(7), was May 2, 2011.
AUTHORITIES SUPPORTING DISCIPLINE.
According to the Standard 2.2, of the Standards for Attorney Sanctions for Professional Misconduct, the appropriate sanction for willful misappropriation is disbarment or, if the amount of funds is insignificantly small or if the most compelling mitigating circumstances clearly predominate, an actual suspension of not less than one year.
"As the term is used in attorney discipline cases, ’willful misappropriation’ covers a broad range of conduct varying significantly in the degree of culpability. An attorney who deliberately takes a client’s funds, intending to keep them permanently and answers the client’s inquiries with lies and evasions, is deserving of more severe discipline than an attorney who has acted negligently, without intent to deprive and without acts of deception. Although lack of evil intent does not immunize an attorney’s conduct from discipline [citation omitted], the attorney’s good faith is an important consideration in determining the degree of discipline to be imposed. Disbarment would rarely, if ever, be an appropriate discipline for an attorney whose only misconduct was a single act of negligent misappropriation, unaccompanied by acts of deceit or other aggravating factors. Thus, we have ordered discipline as light as 30 days of actual suspension when the misappropriation resulted from negligence and other mitigating factors were present." (Edwards v. State Bar (1990) 52 Cal.3d 28 [imposing 1 year actual suspension for willful misappropriation of $3,000 where restitution was made promptly and there were no acts of deceit].)
"Extenuating circumstances sufficient to warrant less than disbarment have been found both in the attorney’s background, which demonstrate that the misconduct is aberrational and hence unlikely to recur, and in the facts relating to the mitigation, which recognizes that more severe discipline is warranted for intentional theft as opposed to negligent acts unaccompanied by evil intent." (In the Matter of Hagen (Review Dept. 1992) 2 Cal. State Bar Ct. Rptr. 153 [recommending 1 year actual suspension for misconduct including willful misappropriation of $929 and gross negligence in handling client funds, among other misconduct].)
Here, Respondent misappropriated approximately $12,328.86 of the funds received on behalf of Master’s Electric on October 31, 2008, but paid the client on January 12, 2009, prior to any State Bar complaint. Respondent again misappropriated approximately $65,913.07 received on behalf of Ochoa during the period from December 31, 2009, to February 26, 2009. He paid $43,531.91 to Ochoa by the end of June 2010 prior to contact by the State and paid the remaining sums in September and October 2010. He did not intend to deprive the clients permanently of their funds. Respondent was candid and cooperative with the State Bar in admitting his misconduct and entering into this stipulation at an early stage of the proceedings in mitigation of his misconduct. Considering the circumstances, a lengthy actual suspension is sufficient to address Respondent’s misconduct and ensure the protection of the public.
Case Number(s): 09-O-16183; 10-O-07527
In the Matter of: James William Biedebach
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: James W. Biedebach and Susan L. Margolis and Dane C. Dauphine
Respondent: : James W. Biedebach
Date: May 26, 2011
Respondent’s Counsel: Susan L. Margolis
Date: May 27, 2011
Deputy Trial Counsel: Dane C. Dauphine
Date: May 27, 2011
Case Number(s): 09-O-16183; 10-O-07527
In the Matter of: James William Biedebach
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: Richard A. Honn
Judge of the State Bar Court
Date: June 22, 2011
[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 June 22, 2011, 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:
SUSAN L MARGOLIS ATTORNEY AT LAW
MARGOLIS & MARGOLIS LLP
2000 RIVERSIDE DR
LOS ANGELES, CA 90039
Checked. by certified mail, No. , with return receipt requested, through the United States Postal Service at , California, addressed as follows:
Checked. by interoffice mail through a facility regularly maintained by the State Bar of California addressed as follows:
I hereby certify that the foregoing is true and correct. Executed in Los Angeles, California, on June 22, 2011.
Signed by: Julieta E. Gonzales
June 22, 2011.
State Bar Court