Case Number(s): 11-O-13960; 11-O-15343, 11-O-18732, 12-O-10587
In the Matter of: Lee S. No, Bar # 249092, A Member of the State Bar of California, (Respondent).
Counsel For The State Bar: Robert A. Henderson
180 Howard Street
San Francisco, California 94105
Telephone: (415) 538-2385
Bar # 173205
Counsel for Respondent: Michael D. Michaels
24476 Howes Drive
Laguna Niguel, California 92677
Telephone: (949) 777-8877
Bar # 97288
Submitted to: Settlement Judge – State Bar Court Clerk’s Office San Francisco.
<<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 1, 2007.
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 14 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):
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.
IN THE MATTER OF: Lee S. No, State Bar No. 249092
STATE BAR COURT CASE NUMBER: 11-O-13960; 11-O-15343, 11-O-18732, 12-O-10587
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 No. 11-O-13960 (Complainant: Romeo Buan)
FACTS:
1. On April 1, 2010, Romeo Buan ("Buan") hired respondent and respondent’s firm, the Quantum Law Firm, to help him obtain a loan modification. On April 1, 2010, Buan paid respondent $4,485 in advance fees.
2. All of the services to be performed by respondent were subsequent to April 1, 2010, when Buan hired respondent.
3. The $4,485 charged and collected by respondent violated section 2944.7(a) of the Civil Code, which prohibited an advanced fee in loan modification matters. Respondent forfeited any right to any portion of the fees when he received them in advance of the services to be performed.
4. On February 2, 2011, respondent’s official membership address was P.O. Box 41290, Sacramento, CA 95841. As of August 17, 2011, respondent’s address had changed to 20320 SW Birch St., Suite 130, Newport Beach, CA 92660. Respondent did not notify Membership Records of his change in address within thirty-days of the change. On October 18, 2011, respondent changed his address with Membership Records.
5. On March 24, 2011, Buan terminated respondent’s services and requested a refund of the advanced fee. To date respondent has failed to refund the $4,485.
CONCLUSIONS OF LAW:
Count Two
6. By agreeing to work on a loan modification on behalf of Buan, and by charging and collecting the fee for the loan modification in advance of the services to be performed, respondent negotiated, arranged or otherwise offered to perform a mortgage loan modification for a fee paid by the borrower, and demanded, charged, collected or received such fee prior to fully performing each and every service respondent had contracted to perform or represented that he would perform in violation of section 2944.7(a) of the Civil Code, and thereby willfully violated Business and Professions Code section 6106.3.
Count Five
7. By failing to refund the $4,485 in illegal fees, respondent failed to refund promptly any part of a fee paid in advance that has not been earned in willful violation of rule 3-700(D)(2).
Count Six
8. By failing to notify Membership Records of his change of address within thirty-days of the change, respondent failed to comply with Business and Professions Code section 6002.1, thereby willfully violating section 60680) of the Business and Professions Code. Case No. 11-O-15343 (Complainant: Blanca Correa)
FACTS:
9. On December 23, 2009, Blanca Correa ("Correa") hired respondent and respondent’s firm, the Quantum Law Firm, to help her obtain a loan modification. Correa made two payments: December 23, 2009 $1,995, and February 3, 2010 $1,995. Correa paid a total of $3,990 in advanced fees for the services to be rendered.
10. All of the services to be performed by respondent were subsequent to December 23, 2009, when Correa hired respondent.
11. The $3,990 charged and collected by respondent violated section 2944.7(a) of the Civil Code, which prohibited an advanced fee in loan modification matters. Respondent forfeited any right to any portion of the fees when he received them in advance of the services to be performed.
12. On December 13, 2010, respondent informed Correa that the services for which he had been retained were complete. On March 10, 17, 18 and 19, 2011, Correa requested a refund of the advanced fees. To date respondent has failed to refund the $3,990 in advanced fees.
CONCLUSIONS OF LAW:
Count One
13. By agreeing to work on a loan modification on behalf of Correa, and by charging and collecting the fee for the loan modification in advance of the services to be performed, respondent negotiated, arranged or otherwise offered to perform a mortgage loan modification for a fee paid by the borrower, and demanded, charged, collected or received such fee prior to fully performing each and every service respondent had contracted to perform or represented that he would perform in violation of section 2944.7(a) of the Civil Code, and thereby willfully violated Business and Professions Code section 6106.3.
Count Four
14. By failing to refund the $3,990 in illegal fees, respondent failed to refund promptly any part of a fee paid in advance that has not been earned in willful violation of rule 3-700(D)(2).
Case No. 11-O-18732 (Complainant: Maximo Arzu)
FACTS:
15. On March 25, 2010, Maximo Arzu ("Arzu") hired respondent and respondent’s firm, the Quantum Law Firm, to help him obtain a loan modification. On March 25, 2010, Arzu paid respondent $2,242 in advance fees for the services to be rendered.
16. All of the services to be performed by respondent were subsequent to March 25, 2010, when Arzu hired respondent.
17. The $2,242 charged and collected by respondent violated section 2944.7(a) of the Civil Code, which prohibited an advanced fee in loan modification matters. Respondent forfeited any right to any portion of the fees when he received them in advance of the services to be performed.
18. On July 2010, Arzu requested a refund of the $2,242 in advanced fees. To date respondent has failed to refund the $2,242 in advanced fees.
CONCLUSIONS OF LAW:
19. By agreeing to work on a loan modification on behalf of Arzu, and by charging and collecting the fee for the loan modification in advance of the services to be performed, respondent negotiated, arranged or otherwise offered to perform a mortgage loan modification for a fee paid by the borrower, and demanded, charged, collected or received such fee prior to fully performing each and every service respondent had contracted to perform or represented that he would perform in violation of section 2944.7(a) of the Civil Code, and thereby willfully violated Business and Professions Code section 6106.3.
20. By failing to refund the $2,242 in illegal fees, respondent failed to refund promptly any part of a fee paid in advance that has not been earned in willful violation of rule 3-700(D)(2).
Case No. 12-O-10587 (Complainant: Chadwick Simpson)
FACTS:
21. On September 27, 2010 Chadwick Simpson ("Simpson") hired respondent and respondent’s firm, the Quantum Law Firm, to help him obtain a loan modification. Simpson made five payments: September 30, 2010 $800, October 30, 2010 $1,000, December 1, 2010 $1,000, January 4, 2011 $1,000, and February 1,2011 $685. Simpson paid a total of $4,485 in advanced fees for the services to be rendered.
22. All of the services to be performed by respondent were subsequent to September 27, 2010, when Simpson hired respondent.
23. The $4,485 charged and collected by respondent violated section 2944.7(a) of the Civil Code, which prohibited an advanced fee in loan modification matters. Respondent forfeited any right to any portion of the fees when he received them in advance of the services to be performed.
24. To date, respondent has failed to refund the $4,485 in advanced fees
CONCLUSIONS OF LAW:
25. By agreeing to work on a loan modification on behalf of Simpson, and by charging and collecting the fee for the loan modification in advance of the services to be performed, respondent negotiated, arranged or otherwise offered to perform a mortgage loan modification for a fee paid by the borrower, and demanded, charged, collected or received such fee prior to fully performing each and every service respondent had contracted to perform or represented that he would perform in violation of section 2944.7(a) of the Civil Code, and thereby willfully violated Business and Professions Code section 6106.3.
26. By failing to refund the $4,485 in illegal fees, respondent failed to refund promptly any part of a fee paid in advance that has not been earned in willful violation of rule 3-700(D)(2).
PENDING PROCEEDINGS:
The disclosure date referred to, on page 2, paragraph A(7), was March 8, 2012.
AUTHORITIES SUPPORTING DISCIPLINE:
Standard 2.7 is the closest applicable standard. It states: "Culpability of a member of a willful violation of that portion of rule 4-200, Rules of Professional Conduct re entering into an agreement for, charging or collecting an unconscionable fee for legal services shall result in at least a six-month actual suspension from the practice of law, irrespective of mitigating circumstances."
In the Matter of Wells (Review Dept. 2006) 4 Cal. State Bar Ct. Rptr. 896 - Wells accepted representation of two clients while she resided in South Carolina, Wells was found to have engaged in the unauthorized practice of law and to have collected an illegal and unconscionable fee. Wells received a six-month actual suspension. Wells had a prior private reproval.
DISMISSALS:
The parties respectfully request the Court to dismiss the following alleged violations in the interest of justice:
Case Nos.: 11-O-13960, Counts: One, Alleged Violations: Failure to Perform with Competence;
Case Nos.: 11-O-13960, Counts: Three, Alleged Violations: Illegal Fee;
Case Nos.: 11-O-13960, Counts: Four, Alleged Violations: Unconscionable Fee;
Case Nos.: 11-O-15343, Counts: Two, Alleged Violations: Illegal Fee;
Case Nos.: 11-O-15343, Counts: Three, Alleged Violations: Unconscionable Fee;
Case Nos.: 11-O-15343, Counts: Five, Alleged Violations: Failure to Release File;
Case Nos.: 11-O-15343, Counts: Six, Alleged Violations: Failure to Respond to Client Inquiries;
Case Nos.: 11-O-15343, Counts: Seven, Alleged Violations: Failure to Update Membership Address;
COSTS OF DISCIPLINARY PROCEEDINGS
Respondent acknowledges that the Office of the Chief Trial Counsel has informed respondent that as of March 8, 2012, the prosecution costs in this matter are $5,945.00. 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): 11-O-13960; 11-O-15343, 11-O-18732, 12-O-10587
In the Matter of: Lee S. No
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: Romeo Buan
Principal Amount: $4,485.00
Interest Accrues From: April 1, 2010
2. Payee: Blanca Correa
Principal Amount: $3,990.00
Interest Accrues From: February 23, 2010
3. Payee: Maximo Arzu
Principal Amount: $2,242.00
Interest Accrues From: March 25, 2010
4. Payee: Chadwick Simpson
Principal Amount: $4,485.00
Interest Accrues From: February 1, 2011
<<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) Romeo Buan
Minimum Payment Amount $200.00
Payment Frequency Monthly
2. Payee/CSF (as applicable) Blanca Correa
Minimum Payment Amount $200.00
Payment Frequency Monthly
3. Payee/CSF (as applicable) Maximo Arzu
Minimum Payment Amount $100.00
Payment Frequency Monthly
4. Payee/CSF (as applicable) Chadwick Simpson Minimum Payment Amount $200.00
Payment Frequency Monthly
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.
SIGNATURE OF THE PARTIES
Case Number(s): 11-O-13960; 11-O-15343, 11-O-18732, 12-O-10587
In the Matter of: Lee S. No
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: Lee S. No
Date: March 16, 2012
Respondent’s Counsel: Michael D. Michaels
Date: March 16, 2012
Deputy Trial Counsel: Robert A. Henderson
Date: March 19, 2012
Case Number(s): 11-O-13960; 11-O-15343, 11-O-18732, 12-O-10587
In the Matter of: Lee S. No
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: Patricia McElroy
Date: March 28, 2012
[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 San Francisco, on March 28, 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 San Francisco, California, addressed as follows:
MICHAEL DANIEL MICHAELS
LAW OFC MICHAEL D MICHAELS
24476 HOWES DR
LAGUNA NIGUEL, CA 92677
checked. by interoffice mail through a facility regularly maintained by the State Bar of California addressed as follows:
ROBERT A. HENDERSON, Enforcement, San Francisco
I hereby certify that the foregoing is true and correct. Executed in San Francisco, California, on March 28, 2012.
Signed by:
Mazie Yip
Case Administrator
State Bar Court