California Bar Journal
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Attorney charged with theft from client goes on trial
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An Encinitas attorney charged with taking money from his brain-damaged client is scheduled to go on trial in San Diego Sept. 28. Jeffrey Michael Brown [#137983] pleaded not guilty last month to one count of grand theft and three counts of passing worthless checks. The State Bar also is investigating whether he misappropriated settlement funds from Kerry Powers, a client who was severely injured in a 1993 automobile accident in Oceanside.

Bar deputy trial counsel Russell Weiner said if the 36-year-old Brown is convicted, he will be placed on interim suspension by the bar and could eventually be summarily disbarred. An attorney faces summary disbarment if convicted of a felony involving moral turpitude.

If convicted, Brown could be sentenced to three years in prison on the grand theft charge and an additional eight months on each of the check charges, if they are ruled separate offenses.

Powers was severely damaged when the driver of a car in which she was a passenger lost control of the vehicle and crashed. She was not expected to live and was in a coma for two and a half months. Now 28, she is in a wheelchair, and has continuing speech, eye, hand and leg injuries requiring physical therapy and surgery.

Powers retained Brown to file a workers' compensation claim on her behalf, as well as a third party claim against her employer, the driver and Mitsubishi.

Brown took the case on a contingency basis and was to receive one-third of any recovery.

Powers received $250,000 in workers' compensation, which was paid directly to her mother on her behalf.

Brown settled the third party claim and in 1995 received $165,000 from Powers' employer and the driver. (Mitsubishi was dismissed from the suit.) Under the terms of the settlement, the bar believes Brown was to receive one-third of the funds for fees and/or costs, he was to reimburse Medi-cal with one-third, and Powers was to receive the balance of $52,000.

He withheld the Medi-cal lien pending resolution of Powers' workers' comp matter; eventually that lien was paid from the workers' comp award. Bar investigator Sheila Campbell said it appears that the amount withheld from the settlement funds for the Medi-cal payment should then have gone to Powers, but she never received the money.

Brown wrote Powers a check for $50,000 in 1997, but it was returned by the bank more than once because of insufficient funds. A $10,000 check he gave her in September 1998 was written on a closed account and an $11,500 check written the following month bounced.

As a result of Brown's failure to pay Powers the money she was owed, she was unable to receive some medical treatment she required, Weiner said.

Powers eventually filed a claim with the bar's Client Security Fund, which compensates clients up to $50,000 for losses due to lawyers' dishonest conduct, and received the maximum of $50,000.

Although the Client Security Fund generally does not compensate clients until discipline has been imposed on an attorney, Brown admitted to a San Diego television station that he took Powers' money and spent it on law firm expenses.

"The money ended up being used by the law firm . . . for various things, which should not have happened," Brown told KGTV-ABC. "I'm sorry it all happened and I'm trying to do what I can to fix the situation."

Once the bar saw the videotape, it acted quickly to compensate Powers financially.

Brown has a prior record of discipline. In 1998, he was placed on two years of probation and given a one-year stayed suspension as a result of commingling personal and client funds in his client trust account, and writing 30 bad checks on the same account.