The California Supreme Court has overruled the State Bar Court in a disciplinary matter involving JOHN MICHAEL BROWN [#38995], 54, of Pleasanton. The court ordered Brown suspended for two years, stayed, with 60 days actual suspension, effective Jan. 17, 1996. The Supreme Court made its decision after reviewing Brown's discipline order from the bar court and determining it was too lenient.
Brown was convicted in 1991 in Alameda County Municipal Court of failing to pay about $36,000 in state employment taxes. He withheld but did not remit his employees' taxes to the state.
Initially, in September 1992, the bar court hearing judge issued a decision finding that Brown's misconduct did not constitute "moral turpitude" and ordered that no discipline be imposed.
However, the bar's Office of Trial Counsel sought review of the decision, which was reversed and remanded to the hearing department.
In light of Brown's mitigating circumstances, the hearing judge recommended a private reproval. Again, the OTC sought review of the decision and Brown eventually received a public reproval.
On its own motion, however, the Supreme Court set aside the public reproval, considering it too lenient. Bar prosecutors then asked the court to impose a one-year actual suspension.
This time, however, the Supreme Court viewed the recommended discipline as too harsh and ordered the 60-day actual suspension.
In its decision, the Supreme Court said it accepted the conclusions of the bar court's review department and agreed that Brown's misconduct did not involve moral turpitude, but did involve other conduct warranting discipline.
From April 1, 1988, through Sept. 30, 1990, Brown withheld state employment taxes from his law office employees - himself, his secretary and a paralegal - but he did not deposit the funds with the state.
Brown used the money to satisfy his personal debts. More specifically, Brown got into financial trouble when he and his wife decided to build a 4,600-square-foot "dream house" on five acres of land. He and his wife planned to build stables and breed show quality Arabian horses.
In 1984, Brown finalized a structured settlement on behalf of a client, with Brown set to receive deferred fees of about $100,000 a year for five years. With these anticipated payments and his salary from his law office, Brown felt he was in a financially desirable position to proceed with his home and stables project.
Unanticipated construction costs, a dispute with the contractor and a decline in income from his law practice all contributed to his financial difficulties.
He sued his contractor but never recovered anything when the contractor went into bankruptcy. Brown's entire home and stables project ended up costing more than $700,000, instead of the projected $475,000, and in 1989 he filed for Chapter 11 bankruptcy. In 1992, he sold the property for $830,000.
During this period, Brown attributed the decline in his business income to a chronic lower intestinal illness resulting in a severe weight loss and to changes in the law which made it more difficult for plaintiff's attorneys to settle personal injury cases.
Brown, who was admitted to the State Bar in 1966, had no prior record of discipline. During his legal career he worked briefly as a superior court research attorney and a deputy district attorney, before joining a law firm specializing in personal injury litigation. He became a sole practitioner in 1978, incorporating in 1985.
Brown is an active member of his community, serving on the boards of several charitable organizations. He also is active in several professional organizations and submitted eight letters of reference attesting to his good character. He acknowledged his wrongdoing, has taken steps to make sure it is not repeated and has repaid his back taxes.
Brown contended that imposing professional discipline for conduct already punished by his criminal conviction constituted double jeopardy.
However, the Supreme Court said he waived any defense of double jeopardy by not asserting it in bar disciplinary proceedings. It also held that the defense of double jeopardy applies only in criminal cases.
In addition, the court stated that "the aim of attorney discipline is not punishment or retribution; rather, attorney discipline is imposed to protect the public, to promote confidence in the legal system and to maintain high professional standards."