The Notice of Disciplinary Charges (NDC), the State Bar's complaint, consists of 28 counts in 25 pages, applying to seven complainants and eight jurisdictional and general allegations The counts themselves repeat the same offenses and kinds of conduct, which at least has the merit of easier summary. To summarize this matter efficiently, while using the Office of the Chief Trial Counsel 's language, I will state the preliminary allegations verbatim and then report the specific offenses alleged.
These are the "Jurisdiction and General Background" allegations:
- STEPHEN R. DIAMOND ("Respondent") was admitted to the practice of law in the State of California on September 24, 1996, was a member at all times pertinent to these charges, and is currently a member of the State Bar of California.
- These general background allegations apply to each and every count contained in this Notice of Disciplinary Charges, and are incorporated in each count, below, as if set forth fully therein.
- In or about mid-2004 Jae Bum Kim ("Kim"), a non-attorney, leased office space at 1200 Wilshire Blvd., Suite 312, Los Angeles, California , 90017 ("the Wilshire Blvd Office). Kim had previously worked as the office manager for an attorney at the same address. The attorney had consolidated his practice in another location, and Kim took over the lease.
- Thereafter, Kim hired a staff of "case managers," including but not limited to, Andy Shin (a/k/a Andy Kim), Dana Chung, Robin Lee, Micky Park, and Evan Chang, and a receptionist, Elsa Villa (hereinafter referred to collectively and individually as "staff"), to form a putative law office. At the time, no attorney worked in the Wilshire Blvd office.
- In or about September 2004, Kim and Respondent entered into an agreement regarding the formation of a personal injury law practice (known as Essence Professional Law Corporation, or, alternatively, as the Law Offices of Stephen R. Diamond, A Professional Law Corporation) Respondent oppened a Client Trust Account (CTA), account no. 046800046, and a business operating account (General Account), account no. 500011734, at the Koreatown Galleria Branch of Hanmi Bank in Los Angeles.
- Kim and staff, thereafter, through at least September 2005, signed up personal injury clients, performed legal work on their files, entered into settlement negotiations with defendant's insurance carriers, settled cases, endorsed settlement checks, made deposits and withdrawals from Respondent's CTA, all pursuant to the agreement entered into between Kim and Respondent in or about September 2004. Kim and staff speak Korean, and Respondent does not. Most of Respondent's clientele at all relevant times were Korean speaking.
- Over the course of their (approximately) one year association, Respondent worked part-time in Wilshire Blvd office, and Kim paid Respondent approximately $5,000 per month in cash. More than $1.330,000 was deposited and withdrawn from Respondent's CTA in that time. Activity ceased in Respondent's CTA at the end of September 2005; its balance was approximately $583, and remained at that sum through at least in or about January 2006.
- More than 200 clients' matters were settled by Kim and staff from September 2004 to September 2005. The corresponding settlement checks were endorsed by Kim and staff," [sic] and deposited into Respondent's CTA. The funds from the settlements were thereafter withdrawn in the form of checks, primarily negotiated in two ways: cashing at a check cashing service located at 3rd Street Liquors in Los Angeles, near the Wilshire Blvd office; or deposited directly into Respondent's General Account. In both instances, the checks were routinely negotiated after affixing the purported endorsement of the payee.
I list the complainants here to uncover possible information concerning their propensity to commit fraud. To anticipate, I suspect the alleged victims' complicity in the operation. The complainants are:
a) Nan Young Yoo; b) Katie Lee; c) Richard Kim, D.C.; d) Wan Ki Chung; e) Seung Duk Lee; and f) the California State Bar, Office of the Chief Trial Counsel. (Where more than one person was involved in a particular accident, I list only the lead complainant.)
The alleged victims' charges comprise: a) Aiding the Unauthorized Practice of Law; b) Failure to Notify of Receipt of Client Funds; c) Failure to Maintain Client Funds in Trust Account; d) Failure to Respond to Client Inquiries/Failure to Inform Client of Significant Development; e) Failure to Release File; and f) Moral Turpitude.
Charges stemming directly from the Office of the Chief Trial Counsel comprised: g) Misuse of Client Trust Account/Commingling; h) Forming a Partnership with a Non-Lawyer; and i) Permitting Misuse of Name.
The case is not yet at issue, as my Motion for Reconsideration of the Motion to Dismiss the Notice of Disciplinary Charges is under submission to the Hon. Richard A. Honn, Supervising Judge of the State Bar Court, Hearing Department. Thus, I have not yet actually answered the NDC, although I have filed three responsive pleadings on questions of law. The Motion to Dismiss the NDC, however, contains a statement of my version of the events, included in the moving papers as a voluntarily provided Statement of the Case. I reproduce that section of my Motion to Dismiss the Notice of Disciplinary Charges here:
Respondent hoped to test in practice his theoretical ideas concerning the effective delivery of legal services to non-mainstream cultures. If necessary, the enterprise would also test respondent's interpretation of rule 1-310 of the Rules of Professional Conduct, because of the contractual terms on which respondent ventured. J.B. Kim agreed to fund and staff the office operations and provide a skilled negotiator. Kim would report directly to respondent, and respondent would have ultimate control of the office and complete control of the practice of law within it. Respondent, viscerally averse to the mechanics of financial management and effectively incompetent in their execution, sought to delegate the operational responsibility for keeping the books, while maintaining a robust system to monitor Kim’s compliance.
Respondent’s favorable bargaining position allowed respondent to negotiate these terms. Kim wanted to remain in the business of law-office support, where Kim had 15 years of experience and public service awards in helping deliver legal services to the Korean community. Kim’s crisis arose when the attorney who had employed him, James Chu, Esq., decided to exit the practice of law. [FN1] Respondent’s willingness to accept minimal remuneration also enhanced his bargaining position. Respondent received $5,000 per month.
Kim’s acts of frank criminality undermined any pristine test of the legal services delivery system, as Kim ensnared some eight Korean immigrants and one non-Korean (“Defrauded Persons,” hereafter), who allowed or suffered the unlawful prosecution of their lawsuits by non-attorneys, who received no supervision on these secret cases. Kim conspired with respondent’s staff to keep Kim’s criminal conduct secret. Having stolen their right to representation by a lawyer, Kim then proceeded to rob these Defrauded Persons’ money.
Kim, Shin, and colleagues plotted undetected by respondent communicating in their native language. Respondent—relying on his clients to report any complaints, problems, or anomalies—thought the absence of client complaints verified the operation’s correctitude and did not entertain the possibility that each and every employee would cooperate in keeping Kim’s operation secret. Kim had only recently hired most of the staff, whom Kim and respondent instructed on respondent’s ultimate authority. When respondent finally received a complaint from Scott Meyers, Esq., despite the fraudulent and extortionate character of Meyers’s demands, respondent immediately investigated. Finding he could not rely on his staff, respondent promptly closed his office.
{FN1] Kim and staff did not work for respondent full time, as they continued to contract with Chu to wind down his office and help him close his case. Respondent's investigation of Kim's misconduct in respondent's office triggered Chu's concern. Chu discovered embezzlement of funds totaling some $30,000.
Much more follows in subsequent installments.
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The stigma of prosecution by the California State Bar and the fear of aggravating the State Bar advocates' irritability dams up almost any public exposure, whether pertaining to the State Bar Court's Hearing Department or its Office of the Chief Trial Counsel. Hungry for information that threatens any lawyer's livelihood, many attorneys scan the entire Discipline section of the Bar Journal, pretending a voyeuristic curiosity about the Members so subjected, where the real and legitimate interest lies in the basis for the discipline imposed. Nothing else in the Journal proves to merit their attention, and the discussion of discipline is no more inherently illuminating. What might cause an honest lawyer to fall afoul of the State Bar? This is the usually unspoken and futile question lawyers address to their reading of the Bar Journal. Whereas the process of prosecution will determine the level of due process, the Bar Journal acquaints lawyers with only the result.
These Installments cannot directly prove the State Bar's penchant for unjust prosecution, even in a single case. They do not target injustice as such because, in truth, injustice is not the basic problem. From what I have learned through dealing with the State Bar, failure to prosecute and insufficiency of charges are as likely as overzealousness to define the State Bar's performance. These Installments should not convince readers that State Bar biases produce harsh outcomes but rather that the incompetence of the State Bar is so extreme that the Bar machinery will necessarily produce the wrong outcome. Incompetence more than overzealousness is the defining trait of the California State Bar, and such incompetence benefits no one except the guiltiest. The State Bar's incompetence should not excuse any complacency by attorneys or the public, as this kind of incompetence does not preclude numerous convictions. This paradox of the State Bar is the riddle that opens the way to understanding why the California State Bar is so incompetent. The paradox is that, incompetence notwithstanding, the State Bar can threaten honest practitioners.
The State Bar's incompetence grows from the absence of real controversies, that is to say, a dearth of seriously contested cases. The State Bar Court, at least through its Hearing Department, functions to avoid real controversies, not to hear them. Consider how the source of our law is the British common law, as it has been fed through the resolution of controversy, as it has evolved to a sophistication where many fundamental precepts have required only the most minute modification over decades, even centuries. The State Bar Court, however, can prevent the statement of controversies with sufficient explicitness to resolve them as matters of legal principle. Its mechanics consist of fear. A wrong tactical guess and an attorney finds himself involuntarily enrolled as inactive. Such a threat does not generate the bold yet small-scale innovations that drive the development of law. And where the law fails to develop in small matters, it must degenerate in large ones.
Bar law, like all law, must continually develop or else degenerate into bureaucratic reflex, but the legal framework governing the State Bar artificially inflates the need for rapid development at the same time as it systematically stymies it. An arcane case law, unavailable through common research tools, largely governs the State Bar Court. A proper respect for legal tradition and a wholesome acceptance of properly informed controversy — where lawyer-respondents know the governing law — would mandate adopting the Code of Civil Procedure, except where specifically amended by Bar rules. The State Bar does this right only for discovery rules. Otherwise, State Bar Court's "Rules of Procedure" wholly supersedes the Code of Civil Procedure, the former's cases confined to The State Bar Court Reporter, except where the State Bar Court’s extensive yet vague and ambiguous rules occasionally state otherwise.
This series ultimately targets the State Bar's simultaneously self-serving and self-defeating rules, buffering the State Bar Court from real controversy. The atrophy of legal thinking, puerility of legal conceptualization, and ham-handedness of execution — in short, the incompetence of the California State Bar's Office of the Chief Trial Counsel — is the concern of these installments. The next installment returns to the story that illustrates and proves this verdict.
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The California State Bar’s Office of the Chief Trial Counsel was awestruck and panic-stricken when it lost its motion for entry of default, in a direct test of its legal position against me, the pro se respondent in Case No. 05-R-04605, et. al.
I start the account in the middle, with the outrageous misconduct of the Office of the Chief Trial Counsel, through Deputy Trial Counsel Melanie J. Lawrence, Esq. The forum is the State Bar Court's Hearing Department, presided over by the Hon. Richard A. Honn. Today’s story is merely the beginning of the extensive coverage and analytic commentary I seek to provide regarding "In the Matter of Stephen R. Diamond, No. 183617, A Member of the State Bar," an action in which I am obviously an interested party.
What follows today is a small but revealing part of the story. If you thought the State Bar Court is simply a court like many others, think again.
1. I filed a motion to reconsider after the court denied my motion to dismiss the notice of Disciplinary Charges. That day, a Tuesday, I had brought my intent to move for reconsideration to the court's attention at an in-person status conference, where the court confirmed that this motion was a proper and timely responsive pleading.
2. I served a copy to the Deputy Trial Counsel. Then I delivered two copies to the filing clerk, to whose window other clerks had directed me. She took my motion to reconsider, inspected it carefully, and stamped my conformed copy “Received.”
3. Although I filed it Tuesday, the motion was not due until the following Monday. On that Monday, the Deputy Trial Attorney e-mailed me. In her words, "At this point you have failed to properly file any responsive document. So, I intend to ask the Court to enter your default."
4. The Deputy Trial Counsel lacked any awareness of the egregiousness of her misconduct. She admitted being served with the actual signed document Tuesday, waited till Monday to point out the oversight, and attempted to exploit it to take a default in a quasi-criminal proceeding, while refusing even to supply documentation.
5. In my opposition, I argued beyond a due process matter concerning notice, the obvious issue, but one fraught with procedural uncertainties. More fundamentally and effectively, I challenged the court's jurisdiction to reject a document for filing after the clerk had accepted it for filing. "The Clerk accepted respondent's motion for filing on September 4, and the court lacked jurisdiction to reject the same document on September 10." I stated of the motion to enter default, "The State Bar’s motion to for entry of default is frivolous, malicious, and outrageous."
6. The Hearing Department of the State Bar Court denied the Deputy Trial Counsel’s motion to enter default, as shocking as this outcome was to the Office of the Chief Trial Counsel. The State Bar Court’s stance during the hearing, however, showed enough bias to discredit it. The court ignored the misconduct of the Deputy Trial Counsel and focused its attention on my failure to recover some mail in my transit. The court declared that I now am "on a short leash." Courts have used the phrase "on a short leash” to mean maintaining tight management of a case. No neutral court would put such a general onus on a party to an action. The court did not acknowledge that the document’s acceptance by the clerk was dispositive of its status as filed and distinguished between “Received” and “Filed.” The court claimed that the whole court system made this distinction, a purported observation that the court thought sufficient justification. On its own initiative, the court effectively took judicial notice of this “fact,” without briefing on either its accuracy or relevance.
More than my case, I am concerned with general issues. The State Bar's method is to make outrageous charges without evidence and then seek evidence through undisciplined discovery. I intend to challenge its methods of work. I am convinced State Bar misconduct is standard. In future installments, I will tell more of this story, its background, and its unfolding. I can afford to be principled because I don't fear the State Bar, partly because my livelihood derives from contracting with lawyers to prepare legal briefs and devise legal theories.
This ongoing account contains the legal theory guiding my case before the State Bar.
·If you are interested in the story, the legal issues it raises, or its conclusions, keep reading my thrice-weekly installments.
· If you like this theory, my writing, or want to know more about what services I might provide for litigation and trial attorneys, see My Profile
