Calaway v. State Bar of California , 41 Cal. 3d 743 ( 1986 )

Opinion

THE COURT.^*

This is a proceeding to review an order of the Review Department of the State Bar Court declining to reinstate petitioner in the practice of law.

Petitioner was admitted to practice in 1956. In 1974, he was convicted in United States District Court of violating 18 United States Code section 1955 (participating in the financing of an illegal gambling business) and 18 United States Code section 371 (conspiracy to violate § 1955). (United States v. Calaway (9th Cir. 1975) 524 F.2d 609, cert. den. (1976) 424 U.S. 967 [47 L.Ed.2d 733, 96 S.Ct. 1462].) The matter was referred to the State Bar for a determination whether the circumstances surrounding the conviction involved moral turpitude or other misconduct warranting discipline. (See Bus. & Prof. Code, §§ 6101, 6102; Cal. Rules of Court, rule 951(c) & (d).)

Following a hearing, a local bar administrative committee found that the offenses involved “conscious and willful acts of moral turpitude” on petitioner’s part and recommended disbarment. The recommendation was approved by the State Bar disciplinary board. In 1977, this court agreed that the acts involved moral turpitude and that disbarment was the appropriate sanction. (In re Calaway (1977) 20 Cal.3d 165 [141 Cal.Rptr. 805, 570 P.2d 1223].)

Petitioner filed an application for reinstatement in November of 1983. (Rules Proc. of State Bar, rule 660 (hereafter rule 660).) Following hearings held in August and October 1984, the hearing panel issued written findings and recommended reinstatement. The review department of the State Bar found, however, that petitioner had failed to sustain his burden of demonstrating fitness to resume practicing.¹ The review department denied reinstatement, and this proceeding followed.

The burden of proving rehabilitation rests with the attorney seeking reinstatement (Feinstein v. State Bar (1952) 39 Cal.2d 541, 546 [248 P.2d 3]), and that burden is heavy. The person seeking reinstatement after disbarment is required to adduce stronger proof of his present honesty and integrity than one seeking admission for the first time whose character has never been in question. In other words, although an application for reinstatement is treated by this court as a proceeding for admission, the proof presented must be sufficient to overcome our prior adverse judgment of the applicant’s character. (Tardiff v. State Bar (1980) 27 Cal.3d 395, 403 [165 Cal.Rptr. 829, 612 P.2d 919].)

Since his disbarment, petitioner has been supporting himself with income from Calaway Enterprises, a company he formed for the purpose of handling real estate and stock market investments. He has acquired, refurbished and sold several properties. He has also continued his work with the Vikings, a charitable organization of some 200 members who raise money for neglected and disabled children. He has been a member for several years, and of late has served on the steering committee, working actively on several projects that benefit disadvantaged children in the community.

Despite this respectable record, the State Bar insists petitioner has not carried his burden of showing by clear and convincing evidence that he is presently fit to practice law. This conclusion is based on the fact that his petition for reinstatement omitted certain information about a third party action in a civil lawsuit. Some background regarding that action is necessary to place this purported omission in context.

In December 1977, relying on evidence adduced at the disbarment proceedings, Yale University brought an action in federal court for damages and injunctive relief against petitioner and others, claiming that petitioner had fraudulently induced the conservatee for whom he had served as conservator to execute a new will in favor of one Jean Rinaldi and to remove Yale University as the beneficiary of the estate.

Two days after the complaint was filed, petitioner notified his malpractice insurance carriers of the pendency of the action. The carriers declined coverage. Petitioner then brought a third party action against the carriers, seeking to have them represent him in the Yale lawsuit. The matter was ultimately resolved favorably to the carriers on summary judgment. In ordering that judgment, the district court found that malpractice insurance policies issued in 1975, 1976 and 1977 had been rescinded ab initio as a result of petitioner’s concealment of material facts in his insurance applications. Specifically, the court found that petitioner had omitted from his applications any mention of an alleged misappropriation of funds from the conservator-ship estate, his involvement in financing the gambling operation, and his federal conviction. The court also found that the applications contained no reference to the State Bar recommendation that he be disbarred.

Despite the foregoing, after the third party claim was dismissed and the underlying action proceeded to trial, a jury found for all defendants—including petitioner—on all causes of action.

In his petition for reinstatement, petitioner reported the Yale lawsuit and the fact that a jury had found for the defendants. The third party proceeding, however, was not included in the requested list of cases in which he had been involved since disbarment.

Reduced to essentials, the State Bar offers two reasons to justify rejection of the present petition: first, petitioner has not shown adequate contrition for the conduct that originally caused his disbarment, and second, he omitted details of ancillary judicial proceedings from his application for reinstatement. Neither point withstands objective scrutiny.

On the first point, the record suggests that the bar expected petitioner to beat his breast and loudly proclaim mea culpa for a dissolute past. As one member of the review panel declared during the hearing, “somewhere along the line I think the man has to belly-up to the Bar and say, T did wrong. I am sorry for it,’ and then come in a bit repentant . . . .” And later he told petitioner’s counsel: “It appears that your client is not the repentant type of individual that we would want to consider for reinstatement.”

Justice Tobriner’s opinion for this court in Hall v. Committee of Bar Examiners (1979) 25 Cal.3d 730, 744-745 [159 Cal.Rptr. 848, 602 P.2d 768], provides the appropriate response to the foregoing demand: a petitioner’s “consistent refusal to retract his claims of innocence and make a showing of repentance appears to reinforce rather than undercut his showing of good character. Precisely because the Committee made clear that [petitioner’s] chances for admission would be improved if he demonstrated remorse, we find his refusal to do so indicative of good character rather than the contrary: [he] refused, in effect, to become the fraudulent penitent for his own advantage.

“An individual’s courageous adherence to his beliefs, in the face of a judicial or quasi-judicial decision attacking their soundness, may prove his fitness to practice law rather than the contrary. We therefore question the wisdom of denying an applicant admission to the bar if that denial rests on the applicant’s choosing to assert his innocence regarding prior charges rather than to acquiesce in a pragmatic confession of guilt, and conclude that [petitioner] should not be denied the opportunity to practice law because he is unwilling to perform an artificial act of contrition. [Fn. omitted.]” (Accord, Hightower v. State Bar (1983) 34 Cal.3d 150, 157 [193 Cal.Rptr. 153, 666 P.2d 10]; Martin B. v. Committee of Bar Examiners (1983) 33 Cal.3d 717, 725-726 [190 Cal.Rptr. 610, 661 P.2d 160].)

Justice Carter, in his caustic prose, put the matter succinctly in his dissenting opinion in Feinstein v. State Bar (1952) 39 Cal.2d 541, 555 [248 P.2d 3]: “The basis of the majority opinion seems to be that petitioner has not made a lachrymose display of penitence, or come to the Throne of Grace humbly begging forgiveness for sins he claims not to have committed. Not only that, but he must apparently produce witnesses who have heard him shout from the roof tops that he was a sinner but has forsaken his sins and is now redeemed. The majority seems to have forgotten that deeds speak louder than selfserving protestations. By the record petitioner has conclusively demonstrated that his conduct since disbarment has established rehabilitation. Nothing more should be required . . . .”

We do not believe petitioner’s original offense was so horrendous as to merit a permanent mark of Cain. Understandably he sought to minimize the seriousness of the offense of which he had been convicted. In doing so he made two convincing points: first, no client had ever been damaged by his past conduct; and second, the federal judge who presided over his trial originally sentenced him to four years in prison, but later reduced that sentence to three years’ probation and then terminated probation after two years. These facts strongly suggest that the judge who heard the evidence did not regard the conduct as heinous as does the State Bar.

Second, the bar maintains that petitioner’s plea for reinstatement “contained false information.” That is a patent exaggeration. At worst, it might be contended that petitioner could have been more explicit in his submission.

Petitioner did report the proceedings in the civil case brought by Yale. The allegations of omissions in applications for insurance were made by a carrier in ancillary proceedings. While petitioner did not provide details of the latter proceedings, his assumption was not unreasonable that the bar would review the entire file if it believed the matter significant.

The hearing panel made a specific finding on that subject: “5. While the questionable information submitted with Petitioner’s action could have been more detailed, it is apparent that there was no intent to mislead the State Bar or to conceal derogatory information.” Since the hearing panel heard the witnesses and reviewed the file and other evidence, its finding should be persuasive. We find it so.

The hearing panel also received testimony from seven witnesses and written character references from twelve persons, accounting for substantially all of petitioner’s time and activities since his disbarment. From this evidence the panel concluded “there was absolutely no evidence, direct or indirect, circumstantial or by hearsay, showing any act or acts of misconduct or association with questionable citizens.”

In sum, we agree with the conclusions of the hearing panel, which were:

“1. While the Petitioner has previously proceeded in an ill-advised fashion in areas of tactics in the handling of his legal and personal affairs, the practices have been discontinued and he has led an exemplary life since his disbarment and no longer associates with questionable citizens.

“2. Petitioner has demonstrated significant and substantial change since his disbarment, sufficient to meet his burden of proving rehabilitation;

“3. Petitioner has met the burden of proving that he is morally fit to practice law in the State of California;

“4. Petitioner has met the burden of proving with reasonable certainty that he will not commit acts of moral turpitude if admitted to practice law.

“5. Petitioner has established present ability and learning in the general law;

“6. Petitioner has established his rehabilitation and personal moral fitness for reinstatement.”

The petition is granted. It is ordered that petitioner be reinstated on the roll of attorneys at law in this state on payment of the fees and taking the oath required by law.

* Before Bird, C. J., Mosk, J., Broussard, J., Reynoso, J., Grodin, J., and Panelli, J.

1 The review department found that (1) petitioner continues to fail to appreciate the nature and gravity of the conduct for which he was disbarred; (2) the petition for reinstatement contained false information on a material matter concerning whether he had been charged with fraud and whether he had failed to disclose a finding against him in a proceeding related to Yale v. Calaway, an action which was instituted in United States District Court after the disbarment proceedings; and (3) petitioner’s character witnesses failed to demonstrate any relevant knowledge of any purported rehabilitation. In addition, the review department believed petitioner failed to “satisfactorily demonstrate his present learning and ability in the law . . . .”