Case Number(s): 09-O-17012-RAP, 09-O-17600-RAP, 10-O-02351-RAP
In the Matter of: Michael L. Goolsby, Bar # 159660, 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, Michael L. Goolsby
3 Park Plaza; Ste. 1650
Irvine, CA 02614-8540
(949) 221-0490
Bar # 159660
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 August 14, 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 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: 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.
FEE ARBITRATION
A. Duty to Notify Individuals of Right to Mandatory Fee Arbitration Within thirty (30) days after the effective date of discipline, respondent agrees to send a letter by certified mail, return receipt requested, to Frank Johnson ("Johnson") and agrees to therein offer to initiate, pay any costs and fees associated with the fee arbitration, and participate in binding fee arbitration with Johnson, upon the request of Johnson, regarding fees respondent received for representation of Johnson, unless respondent has previously sent such a written offer to Johnson. The letter shall include the address and phone number of the Office of Probation along with a statement that the Office of Probation will be monitoring his fee arbitration conditions and may be contacted by the individual.
B. Upon Individual’s Consent to Mandatory Fee Arbitration, Duty to Initiate Fee Arbitration Within forty (40) days after the effective date of discipline, respondent agrees to provide the Office of Probation with a copy of the letter offering to initiate and participate in fee arbitration with Frank Johnson ("Johnson") set forth above, along with a copy of the return receipt from the U.S. Postal Service, or other proof of mailing.
Respondent agrees to advise the Office of Probation, in writing, of any request to participate in fee arbitration made by any individual set forth above within fifteen (15) days after any such request or within sixty (60) days after the effective date of his discipline, whichever is later. Respondent agrees to provide the Office of Probation with any information requested to verify Respondent’s compliance.
Respondent agrees to initiate fee arbitration within fourteen (14) days of any request, including making any payment required by the organization conducting the fee arbitration. Respondent agrees to fully and promptly participate in the fee arbitration as directed by the organization conducting the fee arbitration. Respondent will not be permitted to raise the statute of limitations as a defense to the fee arbitration with respect to any of the above individuals.
Respondent further agrees to accept binding arbitration on the arbitration request form. If the arbitration proceeds as non-binding, however, Respondent hereby agrees to abide by the arbitration award and foregoes the right to file an action seeking a trial de novo in court to vacate the award.
C. Duty to Comply with the Arbitration Award
Within thirty (30) days after issuance of any arbitration award or judgment or agreement reflected in a stipulated award issued pursuant to a fee arbitration matter, or within sixty (60) days after the effective date of discipline, whichever is later, Respondent agrees to provide a copy of said award, judgment or stipulated award to the Office of Probation.
Respondent agrees to abide by any award, judgment or stipulated award of any such fee arbitrator and agrees to provide proof thereof to the Office of Probation within thirty (30) days after compliance with any such award, judgment or stipulated award. If the award, judgment or stipulated award does not set forth a deadline for any payment, Respondent is to make full payment within thirty (30) days of the issuance of any such award, judgment or stipulated award.
To the extent that respondent has paid any fee arbitration award, judgment or stipulated award prior to the effective date of the Supreme Court’s final disciplinary order in this proceeding, respondent will be given credit for such payment(s) provided satisfactory proof of such payment(s) is or has been shown to the Office of Probation.
D. Obligation to Pay Restitution to the Client Security Fund.
If the State Bar Client Security Fund has reimbursed Frank Johnson for all or any portion of any award, judgment or stipulated award pursuant to fee arbitration, respondent agrees to pay restitution to the Client Security Fund of the amount paid, plus applicable interest and costs, in accordance with Business and Professions Code section 6140.5. To the extent the Client Security Fund has paid only principal amounts, respondent will still be liable for interest payments to Frank Johnson. Any restitution to the Client Security Fund is enforceable as provided in Business and Professions Code section 6140.5, subdivision (c) and (d).
E. Waiver of Objections
If the fee arbitration proceeding results in an award to Frank Johnson, Respondent waives any objections related to the Office of the Chief Trial Counsel, Client Security Fund or State Bar Court notification to Johnson regarding assistance in obtaining restitution or payment from the Client Security Fund or from Respondent, at any time after the effective date of Respondent’s discipline.
F. Effect of Failure to Comply with Fee Arbitration Conditions
Respondent understands that failure to strictly comply with these conditions regarding fee arbitration may constitute a violation of his probation. Respondent understands that failure to strictly comply with these conditions regarding fee arbitration may result in this Court ordering Respondent to pay back the full amount of attorneys’ fees paid to Respondent by Frank Johnson plus 10% interest from the date Respondent received the fees.
Case Number(s): 09-O-17012-RAP, 09-O-17600-RAP, 10-O-02351
In the Matter of: Michael L. Goolsby
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: Cherish Keddington
Principal Amount: $2,745.00
Interest Accrues From: April 22, 2009
2. Payee: Susan Hughes
Principal Amount: $8,985.00
Interest Accrues From: May 28, 2009
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) Cherish Keddington
Minimum Payment Amount $1,000.00
Payment Frequency: Each calendar quarter or partial calendar quarter that probation is in effect.
2. Payee/CSF (as applicable) Susan Hughes
Minimum Payment Amount $1,000.00
Payment Frequency: Each calendar quarter or partial calendar quarter that probation is in effect.
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: Michael L. Goolsby, State Bar No. 159660
STATE BAR COURT CASE NUMBER: 09-O-17012-RAP, 09-O-17600-RAP, 10-O-02351-RAP
WAIVER OF VARIANCE:
The parties waive any variance between the Notice of Disciplinary Charges filed on June 9, 2010 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-O-17012-RAP:
1. On April 22, 2009, Michael and Cherish Keddington ("the Keddingtons") hired Respondent to represent them in "a negotiating and counseling capacity" to attempt to obtain modifications to the first and second mortgage loans on their home in Utah. They signed a document entitled "Attorney-Client Fee Contract" for those loan modification services, and they paid Respondent the agreed fixed fee of $2,745.00.
2. Respondent has never been licensed to practice law in the state of Utah.
3. Rule 14-802(a) of the Utah Supreme Court Rules of Professional Practice allows the practice of law in Utah only by "persons who are active, licensed members of the [Utah] Bar in good standing." The practice of law under the rule includes "negotiating legal rights and responsibilities on behalf of another person."
4. In May 2009, Respondent or his agents provided the Keddingtons with legal advice which included (1) instructions to Cherish Keddington to sign her last name on all documents as "Chamberlain", which was the name used in the loan documents and deed, (2) instructions on how to compose a hardship letter, including instruction to write it by hand, and (3) instructions on filling out a financial statement, with an example to follow. The Keddingtons followed the advice given to them by Respondent or his agents.
5. In May 2009, Respondent submitted loan modification packages to the two lenders, with requests for modification of the two loans based upon the submitted financial information. The lender for the first mortgage denied modification on grounds of insufficient financial documentation. The lender for the second mortgage offered a modification which the Keddingtons did not accept. 6. On February 5, 2010, Cherish Keddington sent Respondent a letter demanding a refund of all unearned fees. Respondent did not reply, and he has never refunded anything.
CONCLUSIONS OF LAW FOR CASE NO. 09-O-17012-RAP:
7. The loan modification advice provided to the Keddingtons and the submission of the two loan modification packages to the two lenders constituted the unauthorized practice of law in Utah, in violation of rule 14-802 of the Utah Supreme Court Rules of Professional Practice.
8. Respondent engaged in the unauthorized practice of law in the State if Utah, in violation of Utah’s rule 14-802, and thereby willfully violated rule 1-300(B) of the California Rules of Professional Conduct.
9. Respondent entered into an agreement for, charged, and collected an illegal fee of $2,745.00 for services which constituted the unauthorized practice of law in Utah, in willful violation of rule 4-200(A) of the California Rules of Professional Conduct.
FACTS FOR CASE NO. 09-O-17600-RAP:
10. On March 31, 2009, Robert and Susan Hughes ("the Hugheses") hired Respondent to represent them in "a negotiating and counseling capacity" to attempt to obtain modifications to the first mortgage loans on three real estate parcels they owned in Hawaii. The properties were their home and two rental properties. The Hugheses signed three separate documents entitled "Attorney, Client Fee Contract" for the three loan modification services, each of which stated a fixed fee of $2,995.00, for a total fee of $8,985.00 for the three loans. The Hugheses paid Respondent $4,492.50 on April 3, 2009 and paid him another $4,485.00 on May 28, 2009, for total payments of $8,977.50.
11. Respondent has never been licensed to practice law in the state of Hawaii.
12. Rule 5.5 of the Hawaii Rules of Professional Conduct prohibits the practice of law in Hawaii by persons who are not members of the Hawaii bar. The practice of law under the rule includes "the giving of advice, the preparation of any document or the rendition of any service to a third party affecting the legal rights ... of such party, where such advice, drafting, or rendition of service requires the use of any degree of legal knowledge, skill, or advocacy."
13. In July 2009, Respondent or his agents provided the Hugheses with legal advice which included (1) instructions on how to compose a hardship letter, including instruction to write it by hand, and (2) instructions on filling out a financial statement, with an example to follow. The Hugheses followed the advice given to them by Respondent or his agents.
14. In July and August 2009, Respondent submitted loan modification packages to the three lenders, with requests for modification of each loan based upon the submitted financial information, and consistently interacted with the lenders and the Hugheses during the process with the lenders.
15. On January 21, 2010, Susan Hughes sent Respondent a letter demanding a refund of $8,985.00. Respondent did not reply, and he has never refunded anything.
CONCLUSIONS OF LAW FOR CASE NO. 09-O-17600-RAP:
16. The loan modification advice provided to the Hugheses and the submission of the loan modification packages to the three lenders constituted the unauthorized practice of law in Hawaii, in violation of rule 5.5 of the Hawaii Rules of Professional Conduct.
17. Respondent engaged in the unauthorized practice of law in the State if Hawaii, in violation of rule 5.5 of the Hawaii Rules of Professional Conduct, and thereby willfully violated rule 1-300(B) of the California Rules of Professional Conduct.
18. Respondent entered into an agreement for, charged, and collected an illegal fee of $8,977.50 for services which constituted the unauthorized practice of law in Hawaii, in willful violation of rule 4-200(A) of the California Rules of Professional Conduct.
FACTS FOR CASE NO. 10-O-02351: (UNFILED MATTER)
19. On May 1, 2009, Frank Johnson ("Johnson"), a California resident, received a telephone call from an employee of Modification Services Inc. ("MSI"), who offered to provide loan modification services to Johnson for the first trust deed on Johnson’s home. Johnson agreed to hire MSI for that purpose, but then was informed that the actual contract would be with Respondent. The telephone solicitation from MSI was unsolicited, and Johnson had no prior professional or family relationship with Respondent. Respondent had agreed to accept employment from those clients solicited by MSI.
20. Acting on instructions from MSI, Johnson wired $2,000.00 to Respondent’s general account on May 4, 2009 and wired an additional $1.500.00 on June 4, 2009. After receiving the full $3,500.00, Respondent sent Johnson a document entitled "Attorney-Client Fee Contract" for loan modification services, which Johnson signed and returned on June 9, 2009. The contract stated that Respondent would "represent Client in a negotiating and counseling capacity only with regard to a potential residential loan modification for Client’s real property," but the contract had no entries on the lines provided for name of client, location of property, and the amount of the fee.
21. On November 23, 2009, Johnson sent a letter to MSI demanding a full refund of his $3,500.00. Respondent agreed to a business model with MSI, and due to his failure to supervise he was not aware of the request. Neither MSI nor Respondent responded to Johnson’s letter. Respondent did not refund any of the money, and he did not provide Johnson with an accounting.
CONCLUSIONS OF LAW FOR CASE NO. 10-O-02351: (UNFILED MATTER),
22. By authorizing telephone solicitation of prospective clients for professional employment, where he had no prior family or professional relationship with those prospective clients, Respondent willfully violated rule 1-400(C) of the California Rules of Professional Conduct.
23. By failing to respond to Johnson’s request for a refund and failing to provide Johnson with an accounting, Respondent willfully failed to render an appropriate account to Johnson regarding Johnson’s funds, in violation of rule 4-100(B)(3) of the California Rules of Professional Conduct.
DISMISSALS:
The State Bar respectfully requests the Court to dismiss the following alleged violations in the interests of justice:
Alleged Violation
Case No.: 09-0-17012-RAP, Count: Three, Alleged Violation: Rule 4-100(B)(4)
Case No.: 09-0-17600-RAP, Count: Six, Alleged Violation: Rule 4-100(B)(4)
SUPPORTING AUTHORITY:
Standard 2.6(d) requires that the discipline imposed for the unauthorized practice of law in California under section 6068(k) of the Business and Professions Code shall be "disbarment or suspension depending upon the gravity of the offense or harm, if any, to the victim, with due regard to the purpose of imposing discipline."
Standard 2.10(a) requires that the discipline imposed for a violation of any provision of the Business and Professions Code not specified elsewhere in the standards or a violation of any Rule of Professional Conduct not specified in the standards shall result in reproval or suspension according to the gravity of the offense or the harm, if any, to the victim, with due regard to the purposes of imposing discipline.
PENDING PROCEEDINGS:
The disclosure date referred to on page 2, paragraph A.(7), was December 2, 2010.
COSTS:
Respondent acknowledges that the Office of the Chief Trial Counsel has informed Respondent that as of December 1, 2010, the costs in this matter are $4,892.00. 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.
Respondent has been given three membership fee billing cycles to pay the costs because he will be making restitution of $11,730.00 plus interest to two clients during the two years of probation.
Case Number(s): 09-O-17012-RAP, 09-O-17600-RAP, 10-O-02351-RAP
In the Matter of: Michael L. Goolsby
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: Michael L. Goolsby
Date: December 3, 2010
Respondent’s Counsel:
Date:
Deputy Trial Counsel: Larry De Sha
Date: December 3, 2010
Case Number(s): 09-O-17012-RAP, 09-O-17600-RAP, 10-O-02351-RAP
In the Matter of: Michael L. Goolsby
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.
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. Honn
Date: December 3, 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 Los Angeles, on December 21, 2010, 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:
MICHAEL L. GOOLSBY
LANZA & GOOLSBY
3 PARK PLZ #1650
IRVINE CA 92614
<<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:
LARRY DESHA, Enforcement, Los Angeles
I hereby certify that the foregoing is true and correct. Executed in Los Angeles, California, on December 21, 2010.
Signed by:
Angela Carpenter
Case Administrator
State Bar Court