Opinion
D040768.
7-24-2003
STEVE KASSAB, Petitioner and Appellant, v. CLIENT SECURITY FUND COMMISSION OF THE STATE BAR OF CALIFORNIA, Respondent and Respondents, ROBERT FOYTACK, Real Party In Interest.
Steve Kassab appeals the denial of his petition for a writ of mandate seeking to compel the Client Security Fund Commission of the State Bar of California (the Commission) to authorize a payment to him from the Client Security Fund (the Fund). (Bus. & Prof. Code, § 6140.5.) We affirm because substantial evidence supported the conclusion that the requirements for reimbursement from the Fund were not satisfied.
FACTUAL AND PROCEDURAL BACKGROUND
In March 1998 Steve and his father, George Kassab (together the Kassabs), hired attorney and real party in interest Robert Foytack to represent them in a case Steve had pending against San Diego State University (SDSU) and for an action George wished to file against his workers compensation carrier. Foytack received a $ 2,500 retainer from Steve to perform the work.
Effective July 8, 1998, the Supreme Court of California suspended Foytack from the practice of law for 30 months. Eight days after the effective date of his suspension, Foytack filed a first amended complaint on Steves behalf in Steves action against SDSU. Foytack was unaware of the suspension at that time because he was winding down his law practice and not regularly receiving his mail. When Foytack learned of his disciplinary suspension, he orally advised Steve and performed no further work for him. The State Bar Court made a disciplinary finding that Foytack had filed two false declarations under penalty of perjury with that court stating he had complied with rule 955 of the California Rules of Court and that he had not practiced law during his suspension. Foytacks associate, Lillian Godone-Maresca, prosecuted the action against SDSU on Steves behalf, which ultimately resulted in a judgment for SDSU.
In March 2000 Steve filed a complaint against Foytack and Godone-Maresca alleging causes of action for legal malpractice, fraud and breach of fiduciary duty. Steve took Foytacks default in the action, but he proceeded to trial against Godone-Maresca with the jury rendering a verdict for Godone-Maresca, concluding it was unlikely that Steve would have prevailed in the underlying action against SDSU and awarding him no damages. This court upheld the judgment on appeal, but reversed the order denying Steves requested default judgment against Foytack and remanded the matter to the trial court for a default prove-up hearing to enable Steve to establish damages, if any, against Foytack (Kassab v. Godone-Maresca (June 19, 2002, D037988) [nonpub. opn.]). Steve also filed an unsuccessful small claims action against Foytack.
The Kassabs filed an application with the Commission seeking $ 10,000 in reimbursement from the Fund, representing the $ 2,500 advanced to Foytack plus additional damages. The Commission denied the application, citing Steves unsuccessful actions against Foytack, and concluding that Foytacks retention of the funds did not constitute an act of dishonest conduct within the meaning of rule 6 of the Rules of Procedure for Client Security Fund Matters (all further rule references are to these rules).
The Kassabs petitioned for a writ of mandate in the superior court seeking to compel the Commission to authorize a payout. After considering the decision of the Commission and the appellate decision in Kassab v. Godone-Maresca, supra, D037988, the trial court denied the petition concluding that substantial evidence supported the Commissions finding that the Kassabs were not entitled to reimbursement because Foytack performed work on the Kassabs behalf. Steve appeals from the judgment denying the petition for a writ of mandate. In June 2003 the trial court awarded Steve $ 10,200 as a default judgment against Foytack in Steves action against Foytack for legal malpractice, fraud and breach of fiduciary duty.
DISCUSSION
The purpose of the Fund is to relieve or mitigate "pecuniary losses caused by the dishonest conduct of the active members of the State Bar," with any payments from the Fund being discretionary. (Bus. & Prof. Code, § 6140.5, subd. (a).) "Dishonest conduct" includes the "refusal to refund an advance fee when the lawyer performed no work whatever, or such an insignificant portion of the services that he or she agreed to perform, such that the lawyer can be regarded at the time payment was received as having lacked the intention of performing the work. All other instances of a lawyer failing to return an unearned fee or the disputed portion of a fee are outside the scope of the Fund." (Rule 6(b).)
The trial courts review is limited to examining the administrative record to determine whether the Commissions decision was supported by substantial evidence. (Rule 17; Code Civ. Proc., § 1094.5, subds. (b) & (c); see Johnson v. State Bar (1993) 12 Cal.App.4th 1561, 1566-1567.) On appeal we similarly review the record to ascertain whether substantial evidence supports the judgment. (Bixby v. Pierno (1971) 4 Cal.3d 130, 149, 93 Cal. Rptr. 234, 481 P.2d 242.) In the absence of a statement of decision, we must presume the court made all factual findings necessary to support the judgment. (Yellen v. Board of Medical Quality Assurance (1985) 174 Cal. App. 3d 1040, 1058, 220 Cal. Rptr. 426.) Additionally, we indulge all presumptions to support the judgment on matters as to which the record is silent. (Fundamental Investment etc. Realty Fund v. Gradow (1994) 28 Cal.App.4th 966, 971.) The appellant has the burden of overcoming the presumption of correctness by affirmatively showing error. (Ibid .)
Foytacks refusal to refund the advance fees paid by Steve constituted "dishonest conduct" within the meaning of rule 6(b) only if he (1) performed no work, or (2) performed such an insignificant portion of the services that he agreed to perform, such that it can be said that Foytack lacked the intent to perform the work at the time he received payment. Steve does not dispute that Foytack filed a first amended complaint on his behalf in his action against SDSU; rather, he contends this work did not amount to the provision of legal services because Foytack was not licensed at the time. However, it is unknown whether Foytack drafted the 10-page amended complaint, consisting of four causes of action, before or after the effective date of his suspension. Indulging all intendments and presumptions to support the judgment on matters as to which the record is silent, we conclude this evidence is sufficient to show that Foytack performed some work for Steve before the suspension.
Steve claims the complaint prepared by Foytack was defective and had no value because the trial court granted SDSUs summary judgment motion. However, this argument misconstrues the nature of a summary judgment motion, which is designed to "cut through the parties pleadings" to determine, based on evidence, whether a trial is necessary to resolve the dispute. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) By granting the motion, the trial court necessarily concluded that Steve failed to present evidence supporting his causes of action or that SDSU had established a complete defense thereto. (Id. at p. 850.) Moreover, the jurys finding in Steves action against Godone-Maresca - that it was not likely Steve would have prevailed in his action against SDSU and that he did not suffer any damages - echoes the trial courts conclusion on the summary judgment motion.
Steves contention that Foytack abandoned him also lacks merit because Foytack could not perform additional work for the Kassabs due to his suspension, and Foytack orally advised Steve of this fact. (Arm v. State Bar (1990) 50 Cal.3d 763, 775, 268 Cal. Rptr. 741, 789 P.2d 922 [suspension order disqualifies attorney from practicing law].) Steve also complains that Foytack did not do any work for George. However, Foytack did do some of the work contemplated by Steve at the time Foytack accepted the retainer fee. This is all that was necessary to bring this dispute outside the scope of rule 6(b). The fact Foytack may not have done any work for George pertains to the value of the services rendered, an issue which the Commission is not authorized to resolve. (Rule 6(b).)
Substantial evidence also supports the trial courts conclusion that at the time Foytack received payment, he had the intent to perform the work. Foytack obtained the $ 2,500 retainer fee from Steve in March 1998. As noted by the trial court, "the suspension order was not issued until June 1998, so Foytacks refusal to work on the case after the suspension cannot be construed as an intent not to perform the work in March."
Steve argues that the State Bar Courts finding that Foytack filed false declarations constitutes substantial evidence of dishonesty showing his entitlement to money from the Fund. However, his ability to obtain reimbursement from the Fund is tied to the definition of dishonesty contained within rule 6(b) and the dishonesty he displayed toward the State Bar is not relevant to this determination. Finally, Steves contention that he was entitled to restitution under Business and Professions Code sections 6126.5 to 6128 for Foytacks allegedly dishonest acts is misguided because these statutes do not apply to the Commission. (See generally, Bus. & Prof. Code, §§ 6100 et seq & 6125 et seq. relating to the unauthorized practice of law under the attorney discipline system.)
DISPOSITION
The judgment is affirmed. Client Security Fund Commission of the State Bar of California is entitled to its costs on appeal.
WE CONCUR: OROURKE, J., AARON, J.