State Bar Court of California
Hearing Department
STIPULATION RE FACTS, CONCLUSIONS OF LAW AND DISPOSITION AND ORDER
APPROVING
STAYED
SUSPENSION; NO ACTUAL SUSPENSION
Case Number(s): 12-O-14726
In the Matter of: FREDERICK WILLARD SMITH, JR., Bar # 104913,
A Member of the State Bar of California, (Respondent).
Counsel For The State Bar: Heather E. Abelson, Bar # 243691
Counsel for Respondent: Frederick Willard Smith, Jr., Bar #
104913
Submitted to: Settlement Judge.
Filed: October 4, 2013.
<<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.
A. Parties' Acknowledgments:
1.
Respondent is a member of the State Bar of California, admitted December
3, 1982.
2.
The parties agree to be bound by the factual stipulations contained
herein even if conclusions of law or disposition are rejected or changed by the
Supreme Court.
3.
All investigations or proceedings listed by case number in the caption
of this stipulation are entirely resolved by this stipulation and are deemed
consolidated. Dismissed charge(s)/count(s) are listed under
"Dismissals." The stipulation consists of 11 pages, not including
the order.
4.
A statement of acts or omissions acknowledged by Respondent as cause or
causes for discipline is included under "Facts."
5.
Conclusions of law, drawn from and specifically referring to the facts
are also included under "Conclusions of Law".
6.
The parties must include supporting authority for the recommended level
of discipline under the heading "Supporting Authority."
7.
No more than 30 days prior to the filing of this stipulation, Respondent
has been advised in writing of any pending investigation/proceeding not
resolved by this stipulation, except for criminal investigations.
8.
Payment of Disciplinary Costs-Respondent acknowledges the provisions of
Bus. & Prof. Code §§6086.10 & 6140.7. (Check one option only):
checked. Costs
are added to membership fee for calendar year following effective date of
discipline.
<<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.
B. Aggravating Circumstances [for definition, see Standards for
Attorney Sanctions for Professional Misconduct, standard 1.2(b)]. Facts
supporting aggravating circumstances are required.
<<not>> checked. (1) Prior
record of discipline [see standard 1.2(f)].
<<not>> checked. (a) State Bar Court case # of prior case .
<<not>> checked. (b) Date prior discipline effective
<<not>> checked. (c) Rules of Professional Conduct/ State
Bar Act violations:
<<not>> checked. (d) Degree of prior discipline
<<not>> checked. (e) If Respondent has two or more
incidents of prior discipline, use space provided below or a separate
attachment entitled “Prior Discipline. .
<<not>> checked. (2) Dishonesty:
Respondent's misconduct was surrounded by or followed by bad faith, dishonesty,
concealment, overreaching or other violations of the State Bar Act or Rules of
Professional Conduct.
<<not>> checked. (3) Trust
Violation: Trust funds or property were involved and Respondent refused or was
unable to account to the client or person who was the object of the misconduct
for improper conduct toward said funds or property.
checked. (4) Harm: Respondent's
misconduct harmed significantly a client, the public or the administration of
justice. See "Facts Supporting Aggravating Circumstances" in the
Stipulation Attachment at p. 8.
<<not>> checked. (5) Indifference:
Respondent demonstrated indifference toward rectification of or atonement for
the consequences of his or her misconduct.
<<not>> checked. (6) Lack of
Cooperation: Respondent displayed a lack of candor and cooperation to victims
of his/her misconduct or to the State Bar during disciplinary investigation or
proceedings.
<<not>> checked. (7) Multiple/Pattern
of Misconduct: Respondent's current misconduct evidences multiple acts of
wrongdoing or demonstrates a pattern of misconduct.
<<not>> checked. (8) No
aggravating circumstances are involved.
Additional aggravating circumstances: .
C. Mitigating Circumstances [see standard 1.2(e)]. Facts supporting
mitigating circumstances are required.
<<not>> checked. (1) No Prior
Discipline: Respondent has no prior record of discipline over many years of
practice coupled with present misconduct which is not deemed serious.
<<not>> checked. (2) No Harm:
Respondent did not harm the client or person who was the object of the
misconduct.
<<not>> 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.
<<not>> checked. (4) Remorse:
Respondent promptly took objective steps spontaneously demonstrating remorse
and recognition of the wrongdoing, which steps were designed to timely atone
for any consequences of his/her misconduct.
<<not>> checked. (5) Restitution:
Respondent paid $ on in restitution to without the threat or force of
disciplinary, civil or criminal proceedings.
<<not>> checked. (6) Delay:
These disciplinary proceedings were excessively delayed. The delay is not
attributable to Respondent and the delay prejudiced him/her.
<<not>> checked. (7) Good
Faith: Respondent acted in good faith.
<<not>> 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.
<<not>> 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.
<<not>> checked. (10) Family
Problems: At the time of the misconduct, Respondent suffered extreme
difficulties in his/her personal life which were other than emotional or
physical in nature.
<<not>> checked. (11) Good
Character: Respondent's good character is attested to by a wide range of
references in the legal and general communities who are aware of the full extent
of his/her misconduct.
<<not>> checked. (12) Rehabilitation:
Considerable time has passed since the acts of professional misconduct occurred
followed by convincing proof of subsequent rehabilitation.
<<not>> checked. (13) No
mitigating circumstances are involved.
Additional mitigating circumstances: No Prior
Discipline - See "Facts Supporting Mitigating Circumstances" in the
Stipulation Attachment at p. 8.
Pre-Filing Stipulation - See "Facts
Supporting Mitigating Circumstances" in the Stipulation Attachment at p.
8.
D. Discipline:
checked. (1) Stayed Suspension:
checked. (a) Respondent must be suspended from the
practice of law for a period of one (1) year.
<<not>> checked. i. and until Respondent shows proof
satisfactory to the State Bar Court of rehabilitation and present fitness to
practice and present learning and ability in the law pursuant to standard
1.4(c)(ii) Standards for Attorney Sanctions for Professional Misconduct.
<<not>> checked. ii. and until Respondent pays restitution as
set forth in the Financial Conditions form attached to this stipulation.
<<not>> checked. iii. and until Respondent does the following:
.
<<not>> checked. (b) The above-referenced suspension is
stayed.
checked. (2) Probation: Respondent
must be placed on probation for a period of two (2) years, which will commence
upon the effective date of the Supreme Court order in this matter. (See rule 9.18,
California Rules of Court.)
E. Additional Conditions of Probation:
checked. (1) During the probation
period, Respondent must comply with the provisions of the State Bar Act and
Rules of Professional Conduct.
checked. (2) Within ten (10) days
of any change, Respondent must report to the Membership Records Office of the
State Bar and to the Office of Probation of the State Bar of California
("Office of Probation"), all changes of information, including
current office address and telephone number, or other address for State Bar
purposes, as prescribed by section 6002.1 of the Business and Professions Code.
checked. (3) Within thirty (30)
days from the effective date of discipline, Respondent must contact the Office
of Probation and schedule a meeting with Respondent's assigned probation deputy
to discuss these terms and conditions of probation. Upon the direction of the
Office of Probation, Respondent must meet with the probation deputy either
in-person or by telephone. During the period of probation, Respondent must
promptly meet with the probation deputy as directed and upon request.
checked. (4) Respondent must
submit written quarterly reports to the Office of Probation on each January 10, April 10, July 10, and October 10
of the period of probation. Under penalty
of perjury, Respondent must state whether Respondent has complied with the
State Bar Act, the Rules of Professional Conduct, and all conditions of
probation during the preceding calendar quarter. Respondent must also state
whether there are any proceedings pending against him or her in the State Bar
Court and if so, the case number and current status of that proceeding. If the
first report would cover less than 30 days, that report must be submitted on
the next quarter date, and cover the extended period.
In addition to all quarterly reports, a final report, containing the same
information, is due no earlier than twenty (20) days before the last day of the
period of probation and no later than the last day of probation.
<<not>> checked. (5) Respondent
must be assigned a probation monitor. Respondent must promptly review the terms
and conditions of probation with the probation monitor to establish a manner
and schedule of compliance. During the period of probation, Respondent must
furnish to the monitor such reports as may be requested, in addition to the
quarterly reports required to be submitted to the Office of Probation.
Respondent must cooperate fully with the probation monitor.
checked. (6) Subject to assertion
of applicable privileges, Respondent must answer fully, promptly and truthfully
any inquiries of the Office of Probation and any probation monitor assigned
under these conditions which are directed to Respondent personally or in
writing relating to whether Respondent is complying or has complied with the
probation conditions.
checked. (7) Within one (1) year
of the effective date of the discipline herein, Respondent must provide to the
Office of Probation satisfactory proof of attendance at a session of the Ethics
School, and passage of the test given at the end of that session.
<<not>> checked. No Ethics School recommended. Reason: .
<<not>> checked. (8) Respondent
must comply with all conditions of probation imposed in the underlying criminal
matter and must so declare under penalty of perjury in conjunction with any
quarterly report to be filed with the Office of Probation.
<<not>> checked. (9) The
following conditions are attached hereto and incorporated:
<<not>>
checked. Substance Abuse Conditions.
<<not>>
checked. Law Office Management Conditions.
<<not>>
checked. Medical Conditions.
<<not>>
checked. Financial Conditions.
F. Other Conditions Negotiated by the Parties:
checked. (1) Multistate
Professional Responsibility Examination: Respondent must provide proof of
passage of the Multistate Professional Responsibility Examination
("MPRE"), administered by the National Conference of Bar Examiners,
to the Office of Probation within one year. Failure to pass the MPRE results
in actual suspension without further hearing until passage. But see rule
9.10(b), California Rules of Court, and rule 5.162(A) & (E), Rules of
Procedure.
<<not>> checked. No MPRE recommended. Reason: .
<<not>> checked. (2) Other Conditions:
.
Attachment language (if any): .
ATTACHMENT TO
STIPULATION RE FACTS, CONCLUSIONS OF LAW AND DISPOSITION
IN THE MATTER OF: FREDERICK WILLARD SMITH, JR, State Bar No. 104913
STATE BAR COURT CASE NUMBER: 12-O-14726
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. 12-O-14726-PEM (Complainants: Anne Marie Field and Barbara Cook)
FACTS:
1. From 2002 to December 2010, Respondent was employed by Willilee Mitchell
("Mitchell") to provide legal services, including estate planning and
asset management.
2. On November 1, 2004, Respondent notified Mitchell of Waterford Ranch,
LLC, a company owned by Respondent and Respondent’s son, and asked Mitchell to
loan him money to invest in the LLC.
3. On November 18, 2004, Mitchell gave Respondent $250,000 as a loan for
Waterford Ranch, LLC.
4. On November 22, 2004, Respondent provided to Mitchell an unsecured
promissory note signed by Respondent as manager of Waterford Ranch, LLC in
return for Mitchell’s $250,000 loan. The note required Respondent to make
monthly interest payments of $2,083.33, and that all remaining unpaid principal
and interest became due and payable on November 22, 2008.
5. The loan was not fair or reasonable to Mitchell.
6. At no time, did Respondent advise Mitchell in writing that she may seek
the advice of an independent lawyer of her choice before entering into the loan
with Respondent, give Mitchell a reasonable opportunity to seek that advice, or
thereafter obtain her consent in writing to the terms of the loan.
7. At no time prior to Mitchell’s death on December 2, 2010, did Respondent
pay the principal amount of $250,000 back to Mitchell. Respondent did pay the
interest due on the note to Mitchell.
8. On August 15, 2011, following Mitchell’s death, nieces of Mitchell and
co-beneficiaries under Mitchell’s will ("Plaintiffs"), filed a civil
action arising out of the $250,000 promissory note against Respondent in
Stanislaus County Superior Court, Cook v. Smith, Case No. 668095 ("Civil
Action").
9. On May 15, 2012, Respondent sent a proposed settlement agreement and
release to Plaintiffs’ legal counsel to settle the Civil Action which contained
a requirement that Plaintiffs not file a complaint with the State Bar against
Respondent.
10. In July 2012, the parties settled the Civil Action.
CONCLUSIONS OF LAW:
11. By entering into a loan with Mitchell when the transaction and its
terms were not fair and reasonable to Mitchell and without fully disclosing and
transmitting in writing the terms of the transaction to Mitchell and not
obtaining Mitchell’s written consent, or giving Mitchell time to seek
independent counsel, Respondent entered into a business transaction with a
client without complying with the requirements that the transaction or
acquisition and its terms were fair and reasonable to the client; the transaction
or acquisition and its terms were fully disclosed and transmitted in writing to
the client in a manner which should reasonably have been understood by the
client; the client was advised in writing that the client may seek the advice
of an independent lawyer of the client’s choice; the client was given a
reasonable opportunity to seek that advice; and the client thereafter consented
in writing to the terms of the transaction or acquisition, in wilful violation
of Rules of Professional Conduct, rule 3-300.
12. By requiring that one of the terms of settling the Civil Action be that
Plaintiffs not report Respondent’s professional misconduct to the State Bar,
Respondent acted as a party or as an attorney for a party and agreed or sought
agreement that professional misconduct or the terms of a settlement of a claim
for professional misconduct would not be reported to the disciplinary agency,
in wilful violation of Business and Professions Code, section 6090.5.
FACTS SUPPORTING AGGRAVATING CIRCUMSTANCES.
Harm (Std. 1.2(b)(iv)): Respondent substantially harmed Mitchell’s
beneficiaries by forcing them to file a civil action against him to recover
monies associated with the $250,000 loan. This unnecessary legal proceeding was
time-consuming, costly, and burdensome for Mitchell’s beneficiaries and to the
legal system, and constitutes an aggravating factor pursuant to Standard
1.2(b)(iv).
FACTS SUPPORTING MITIGATING CIRCUMSTANCES.
No Prior Discipline (Std. 1.2(e)(i)): Although Respondent’s misconduct is
serious, he is entitled to mitigation for 30 years of discipline-free practice.
(In the Matter of Riordan (Review Dept. 2007) 5 Cal. State Bar Ct. Rptr. 41,
49.)
Prefiling Stipulation: Respondent is entitled to mitigation for entering
into a full stipulation with the Office of Chief Trial Counsel prior to the
filing of a Notice of Disciplinary Charges, thereby saving State Bar Court time
and resources. (In the Matter of Downey (Review Dept. 2009) 5 Cal. State Bar
Ct. Rptr. 151, 156.)
AUTHORITIES SUPPORTING DISCIPLINE.
The Standards for Attorney Sanctions for Professional Misconduct provide a
"process of fixing discipline" pursuant to a set of written
principles to "better discharge the purposes of attorney discipline as
announced by the Supreme Court." (Rules Proc. of State Bar, tit. IV, Stds.
for Atty. Sanctions for Prof. Misconduct, Introduction (all further references
to standards are to this source).). The primary purposes of disciplinary
proceedings and of the sanctions imposed 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." (ln re Morse (1995) 11 Cal.4th 184, 205; std. 1.3.)
Although not binding, the standards are entitled to "great
weight" and should be followed "whenever possible" in
determining level of discipline. (ln re Silverton (2005) 36 Cal.4th 81, 92,
quoting In re Brown (1995) 12 Cal.4th 205, 220 and In re Young (1989) 49 Cal.3d
257, 267, fn. 11.) Adherence to the standards in the great majority of cases
serves the valuable purpose of eliminating disparity and assuring consistency,
that is, the imposition of similar attorney discipline for instances of similar
attorney misconduct. (ln re Naney (1990) 51 Cal.3d 186, 190.) Any discipline
recommendation different from that set forth in the applicable standards should
clearly explain the reasons for the deviation. (Blair v. State Bar (1989) 49
Cal.3d 762, 776, fn. 5.)
Respondent violated Rules of Professional Conduct, rule 3-300, and Business
and Professions Code, section 6090.5. Standard 1.6 (a) requires that where a
respondent commits two or more acts of misconduct, and different sanctions are
prescribed by the standards that apply to those acts, the sanction imposed
shall be the more or most severe prescribed in the applicable standards. The
most severe sanction is Standard 2.8 which requires that a violation of rule
3-300 "shall result in suspension unless the extent of the member’s
misconduct and the harm to the client are minimal, in which case, the degree of
discipline shall be reproval."
Here, Respondent obtained a loan from his client without informed written
consent. Respondent also attempted to settle the Civil Action with a settlement
agreement which contained a requirement that Plaintiffs not file a complaint
with the State Bar against Respondent. Respondent’s misconduct substantially
harmed Mitchell’s decedents, in that they had to file a civil lawsuit in order
to recover the unpaid interest and principal due under the note from
Respondent. In mitigation, Respondent has 30 years of discipline free practice,
which is tempered by the seriousness of Respondent’s misconduct, and is
entering into a pre-filing stipulation. On balance, Respondent’s misconduct
warrants more than a reproval, yet less than an actual suspension. A one-year
stayed suspension with probation conditions will serve the purposes of attorney
discipline.
Case law also supports a one-year stayed suspension. In the State Bar case
In the Matter of Van Sickle (Review Dept. 2006) 4 Cal. State Bar Ct. Rptr. 980,
the Review Department recommended that the attorney be actually suspended for
90 days for violating rule 4-200 and 3-300 in multiple client matters. The
attorney’s .misconduct was aggravated by multiple acts of misconduct and
significant harm, and mitigated by a pretrial stipulation and the attorney’s
demonstrated pro-bono and community service.
Unlike in Van Sickle, Respondent’s misconduct is less egregious, since he
did not charge or collect an unconscionable fee. Also, Respondent’s misconduct
is limited to a single client and a single transaction.
Based on all relevant factors, Standard 2.8, and relevant caselaw,
Respondent’s misconduct warrants a one-year stayed suspension.
COSTS OF DISCIPLINARY PROCEEDINGS.
Respondent acknowledges that the Office of the Chief Trial Counsel has
informed respondent that as of September 17, 2013, the prosecution costs in
this matter are $4,449.69. 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.
EXCLUSION FROM MCLE CREDIT
Pursuant to rule 3201, Respondent may not receive MCLE credit for
completion of State Bar Ethics School. (Rules Proc. of State Bar, rule 3201.)
SIGNATURE OF THE PARTIES
Case Number(s): 12-O-14726
In the Matter of: FREDERICK WILLARD SMITH, JR
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: FREDERICK WILLARD SMITH, JR
Date: 9/26/13
Respondent’s Counsel:
Date:
Deputy Trial Counsel: Heather E. Abelson
Date: 10/1/13
STAYED SUSPENSION ORDER
Case Number(s): 12-O-14726
In the Matter of: FREDERICK WILLARD SMITH, JR.
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: Lucy Armendariz
Date: 10/4/13
CERTIFICATE OF SERVICE
[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 October 4,
2013, 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:
FREDERICK WILLARD SMITH, JR.
LAW OFFICES OF FREDERICK W. SMITH, JR.
1455 E "G" ST STE. B
PO BOX 11690
OAKDALE, CA 95361
<<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:
HEATHER E. ABELSON, Enforcement, San Francisco
I hereby certify that the foregoing is true and correct. Executed in San
Francisco, California, on October 4, 2013.
Signed by:
Bernadette Molina
Case Administrator
State Bar Court