Case Number(s): 11-O-13376, 11-O-13389, 11-O-14018, 11-O-14054
In the Matter of: Kevin Patrick Kelley, Bar # 140462 , A Member of the State Bar of California, (Respondent).
Counsel For The State Bar: Margaret P. Warren, 1149 So. Hill St., Los Angeles, CA 90015-2299, (213) 765-1342, Bar # 108774
Counsel for Respondent: David A. Clare, 444 W. Ocean Blvd., Suite 800, Long Beach, CA 90802, Bar # 44971
Submitted to: Assigned Judge, State Bar Court Clerk’s Office Los Angeles
Filed: 09/06/2011
<<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 6, 1989.
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 16 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: costs to be paid in equal amounts prior to February | for the following two billing cycles following the effective date of the Supreme Court order: 2013 and 2014.. (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.
Additional aggravating circumstances:
Additional mitigating circumstances: Please see p.13 [of attachment] below
Case Number(s): 11-O-13376, 11-O-13389, 11-O-14018, 11-O-14054
In the Matter of: Kevin Patrick Kelley # 140462
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: Please see pp. 12-13, [of attachment] below.
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.
b. Installment Restitution Payments
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) Please see pp. 12-13 [of attachment] below.
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
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.
c. Client Funds Certificate
<<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.
d. Client Trust Accounting School
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: Kevin Patrick Kelley, # 140462
STATE BAR COURT CASE NUMBER: 11-O-13376, 11-O-13389, 11-O-14018, 11-O-14054
FACTS AND CONCLUSIONS OF LAW.
Respondent admits that the following facts are true and that he is culpable of violations of the specified statutes and/or Rules of Professional Conduct:
Case Nos. 11-O-13376; 11-O-13389, 11-O-14018, 11-O-14054
Background Facts:
1. Respondent is not presently, and never has been, admitted to the practice of law or otherwise been entitled to practice law at any time, in the following jurisdictions: the State of Minnesota; the State of Florida; the State of Connecticut; and the State of Washington.
2. At all relevant times herein, Respondent maintained a Client Trust Account at the Bank of the West, account no. [xxxxxxxxx]~ ("CTA"). Footnote (1): The account number has been redacted in the interests of privacy protection. All references herein to "CTA" are to this Bank of the West account.
3. From March 1, 2010 through the end of July 2011, Respondent did not promptly withdraw earned fees from his CTA.
Case No. 11-O-13376
Facts:
4. On June 30, 2009, Marcia and Robert Benson ("Bensons"), residents of the State of Minnesota, hired Respondent to negotiate and obtain for them a modification of a residential home loan secured by real property located in the State of Minnesota.
5. Respondent knew that the Bensons’ property was located in a jurisdiction in which Respondent was not entitled to practice law.
6. The Bensons paid Respondent a flat fee totaling $2,000.00, by check in the amount of $1,000.00, dated July 29, 2009; and by check in the amount of $1,000.00, dated August 19, 2009.
7. In March 2010, Respondent agreed to refund in full the $2,000.00 he received in legal fees from the Bensons, in monthly installments.
8. To date, Respondent has made five refund payments to the Bensons, totaling $350.00, by checks drawn on Respondent’s CTA, as follows:
Date: April 1, 2010, Check No 4107, Amount $100.00
Date: May 21, 2010, Check No 4138, Amount $100.00
Date: June 28, 2010, Check No 111, Amount $50.00
Date: July 31, 2010, Check No 129, Amount $50.00
Date: Feb. 22, 2011, Check No 224, Amount $50.00
9. On and after April 1, 2010, there were no funds in Respondent’s CTA belonging to the Bensons.
Case No. 11-O-13389
Facts:
10. In August 2009, Lynn and William Popp ("Popps"), residents of the State of Florida, hired Respondent to negotiate and obtain for them a modification of a residential home loan secured by real property in the State of Florida.
11. Respondent knew that the Popps’ property was located in a jurisdiction in which Respondent was not entitled to practice law.
12. On August 10, 2009, the Popps paid Respondent a flat fee totaling $2,000.00.
13. In January 2010, the Popps terminated Respondent’s services and requested a refund in full of the $2,000.00 in fees they had paid him. Respondent agreed to refund the fee in full, in installments. Respondent paid the first installment, in the amount of $500.00, by cashier’s check dated February 12, 2010.
14. To date, Respondent has made seven additional refund payments to the Popps, totaling $700.00, by checks drawn on Respondent’s CTA, as follows:
Date: March 19, 2010: Check No.: 4102, Amount: $250.00
Date: April 26, 2010: Check No.: 4116, Amount: $100.00
Date: May 21, 2010: Check No.: 4140, Amount: $100.00
Date: June 28, 2010: Check No.: 112, Amount: $ 50.00
Date: July 31, 2010: Check No.: 130, Amount: $ 50.00
Date: Sept. 30, 2010: Check No.: 163, Amount: $ 50.00
Date: Nov. 30, 2010: Check No.: 191, Amount: $ 50.00
Date: Feb. 24, 2011: Check No.: 230, Amount: $ 50.00
15. On and after March 19, 2010, there were no funds in Respondent’s CTA belonging to the Popps.
Case No. 11-O-14018
Facts:
16. In August 2009, Everett Morrell ("Morrell"), a resident of the State of Connecticut, hired Respondent to negotiate and obtain for Morrell modifications of residential home loans secured by real property located in the State of Connecticut.
17. Respondent knew that Morrell’s property was located in a jurisdiction in which Respondent was not entitled to practice law.
18. On August 6, 2009, Morrell paid Respondent a flat fee of $7,500.00.
Case No. 11-O-14054
Facts:
19. In July 2009, Brenda Johnston ("Johnston"), a resident of the State of Washington, hired Respondent to negotiate and obtain for Johnston a modification of a residential home loan secured by real property located in the State of Washington.
20. Respondent knew that Johnston’s property was located in a jurisdiction in which Respondent was not entitled to practice law.
21. On July 5, 2009, Johnston paid Respondent a flat fee of $2,200.00.
22. On June 1, 2010, Johnston sent Respondent a letter, terminating his services and requesting a full refund of the $2,200.00 flat fee she had paid him.
23. On August 16, 2010, after discussing with Johnston her request for a refund, Respondent wrote to Johnston, confirming that he would refund the $2,200.00 in installments, as Respondent no longer had the $2,200.00 and could not refund it in one lump sum. Respondent paid the first installment to Johnston, in the amount of $100.00, on August 15, 2010.
24. To date, Respondent has made six additional refund payments to Johnston, totaling $375.00, by checks drawn on Respondent’s CTA, as follows:
Date: Sept. 30, 2010, Check No. 165, Amount: $100.00
Date: Nov. 23, 2010, Check No. 190, Amount: $ 50.00
Date: Feb. 24, 2011, Check No. 227, Amount: $ 50.00
Date: April 8, 2011, Check No. 244, Amount: $ 50.00
Date: June 9, 2011, Check No. 265, Amount: $ 75.00
Date: July 29, 2011, Check No. 292, Amount: $ 50.00
25. On and after September 30, 2010, there were no funds in Respondent’s CTA belonging to Johnston.
Legal Conclusions--Case Nos. 11-O-13376; 11-O-13389; 11-O-14018; 11-O-14054
26. By agreeing to represent, and representing, Benson, Popp, Morrell, and Johnston as an attorney in seeking modifications of their mortgages on real property located in the States of Minnesota, Florida, Connecticut, and Washington, respectively, when Respondent was not entitled to practice law in the States of Minnesota, Florida, Connecticut, and Washington, Respondent held himself out as entitled to practice law, and practiced law, in jurisdictions in violation of the regulations of the profession in those jurisdictions, in willful violation of rule 1-300(B) of the Rules of Professional Conduct.
27. By entering into an agreement for, charging, and collecting legal fees from Benson, Popp, Morrell, and Johnston when he was not licensed to practice law in the States of Minnesota, Florida, Connecticut, and Washington, respectively, Respondent entered into an agreement for, charged, and collected an illegal fee from Benson, Popp, Morrell, and Johnston in willful violation of rule 4-200(A) of the Rules of Professional Conduct.
Legal Conclusions Case Nos. 11-O-13376; 11-O-13389; 11-O-14054
28. By issuing checks to the Bensons, the Popps, and Johnston against CTA funds that did not belong to the Bensons, Popp, and Johnston, Respondent deposited or commingled funds belonging to Respondent in his CTA.
29. By not promptly withdrawing funds which he had earned as fees from his CTA at the earliest reasonable time after his interest in the funds became fixed, Respondent commingled funds belonging to Respondent in a client trust account, in willful violation of Rule 4-100(A) of the Rules of Professional Conduct.
FINANCIAL CONDITIONS, RESTITUTION.
Respondent must pay restitution (including principal amount, plus statutory interest of 10% per annum) to the payees listed below, on the payment schedule set forth below. If the Client Security Fund ("CSF") has reimbursed one or more of the payees for all or any portion of the principal amounts listed below, Respondent must pay restitution to CSF in the amount(s) paid, plus applicable interest and costs. Respondent is to pay any and all amounts owed to the payees listed below, before making any reimbursement to CSF, if CSF makes payment(s), in any amount(s), to any payee(s).
Payee: Marcia or Robert Benson, Principal Amount: $1,650.00, Interest Accrues From: August 6, 2009
Payee: Lynn or William Popp, Principal Amount: $ 800.00, Interest Accrues From: August 10, 2009
Payee: Everett Morrell, Principal Amount: $ 7,500.00, Interest Accrues From: August 6, 2009
Payee: Brenda Johnston, Principal Amount: $1,725.00, Interest Accrues From: July 5, 2009
Respondent must make a minimum payment of $1,070.00 in each of the first eleven (11) reporting quarters of his probation. Respondent has the discretion to determine which payee(s) he will pay each quarter. Respondent may, in his discretion, elect to pay two or more payees per quarter, as long as the total amount paid equals or exceeds the minimum quarterly payment of $1,070.00.
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 thirty (30) days prior to the expiration of the period of probation, Respondent must make any necessary final payment(s) in order to complete the payment of restitution, including interest, in full.
Respondent waives any objection to payment by the State Bar Client Security Fund upon a claim for the principal amount of restitution set forth herein.
PENDING PROCEEDINGS.
The disclosure date referred to, on page 2, paragraph A (7), was August 19, 2011.
AGGRAVATING CIRCUMSTANCES.
Prior Discipline:
1. Case Nos. 99-O-12183, 00-O-10202
Effective date of discipline: Nov. 15, 2000
Rules of Professional Conduct/State Bar Act violations: Rule 4-100(A)
Degree of discipline: Private Reproval
2. Case No. 01-O-02822
Effective date of discipline: Aug. 27, 2003
Rules of Professional Conduct/State Bar Act violations: Rule 4-100(A)
Degree of discipline: one year suspension, stayed; two year probation; thirty-day actual suspension.
MITIGATING CIRCUMSTANCES.
Respondent’s issuance of checks drawn on his CTA to pay personal obligations did not result in actual harm to any clients.
Respondent agreed to refund in full, and has refunded a portion of, the fees he received from the Bensons, the Popps, and Johnston before they complained to the State Bar. (Note: Respondent has not refunded any monies to Everett Morrell because Morrell did not request a refund.)
AUTHORITIES SUPPORTING DISCIPLINE.
Standard 1.3 provides:
The primary purposes of disciplinary proceedings conducted by the State Bar of California and of sanctions imposed upon a finding or acknowledgment of a member’s 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. Rehabilitation of a member is a permissible object of a sanction imposed upon the member but only if the imposition of rehabilitative sanctions is consistent with the above-stated primary purposes of sanctions for professional misconduct.
Standard 2.2 (b) provides, in pertinent part:
Culpability of a member of... the commission of another violation of rule 4-100... none of which offenses result in the willful misappropriation of entrusted funds or property shall result in at least a three month actual suspension from the practice of law, irrespective of mitigating circumstances.
Standard 2.6 states that disbarment or suspension is the appropriate discipline for violations of 6068(a), 6125 and 6126, depending on the gravity of the offense or the harm, if any, to the victim, with due regard to the purposes of imposing discipline set forth in standard 1.3, which would be analogous to the 1-300(B) charges.
Standard 2.10 provides: Culpability of a member of a violation of any provision of the Business and Professions Code not specified in these standards or of a willful violation of any Rule of Professional Conduct not specified in these 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 set forth in standard 1.3.
Standard 1.7 (b) provides that a member who has a record of two prior impositions of discipline is found culpable of professional misconduct in a subsequent disciplinary proceeding, the degree of discipline in the current proceeding shall be disbarment unless the most compelling mitigating circumstances clearly predominate. The Supreme Court has reminded us that the Standards are entitled to great weight and the State Bar Court should follow their guidance wherever possible. In re Robert Silverton (2005) 36 Cal.4th 81, 92. However, the Supreme Court also recognizes that the State Bar Court may deviate from the Standards where there exists grave doubt as to the propriety of applying them in a particular case. Silverton, 36 Cal. 4th at p. 92. For example, deviation from the Standards may be appropriate where extraordinary circumstances exist or where the imposition of discipline called for by the Standards would be manifestly unjust. The parties submit that it would be manifestly unjust to apply Standard 1.7(b) in this matter without deviation. While Respondent’s conduct was improper, it was neither due to, nor motivated by, intentional dishonesty or venality on his part. The parties submit that the protection of the public, the courts and the legal profession, and the preservation of public confidence in the legal profession, will be served by the disposition in this matter, which focuses on the rehabilitation of Respondent through the imposition of a substantial period of actual suspension, coupled with a substantial period of probation. During the period of probation, Respondent will be required, among other things, to attend the State Bar’s Ethics School and Trust Account School.
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. The MCLE credit for Ethics School will be in addition to Respondent’s regular MCLE requirement.
Case Number(s): 11-O-13376, 11-O-13389, 11-O-14018, 11-O-14054
In the Matter of: Kevin Patrick Kelley, Bar # 140462
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: Kevin Patrick Kelley, David A. Clare, & Margaret P. Warren
Respondent: Kevin Patrick Kelley
Date: 08/24/2011
Respondent’s Counsel: David A. Clare
Date: 08/26/2011
Deputy Trial Counsel: Margaret P. Warren
Date: 08/29/2011
Case Number(s): 11-O-13376, 11-O-13389, 11-O-14018, 11-O-14054
In the Matter of: Kevin Patrick Kelley, Bar # 140462
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: Donald F. Miles
Judge of the State Bar Court: Donald F. Miles
Date: 09/06/2011
[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 September 6, 2011, I deposited a true copy of the following document(s):
STIPULATION RE FACTS, CONCLUSION OF THE 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 ALAN CLARE
DAVID A CLARE, ATTORNEY AT LAW
444 W OCEAN BLVD STE 800
LONG BEACH CA 90802
Courtesy copy: NA
checked. by interoffice mail through a facility regularly maintained by the State Bar of California addressed as follows:
MARGARET WARREN, Enforcement, Los Angeles
I hereby certify that the foregoing is true and correct. Executed in Los Angeles, California, on September 6, 2011.
Signed by: Tammy Cleaver
Case Administrator
State Bar Court