Worth v. State Bar

[339]

Opinion

THE COURT.

Proceeding to review a recommendation of the Disciplinaiy Board of the State Bar (board) that petitioner be suspended from the practice of law for a period of three years on conditions of probation including one-year actual suspension.

Admitted to practice on July 31, 1952, petitioner is also a licensed real estate broker and a licensed contractor. He has not been the subject of previous disciplinary proceedings.

Petitioner’s wholly owned corporation, Flight Deck Inn and Restaurant (Flight Deck), purchased a parcel of land in Los Angeles County. Petitioner planned to combine the property with two contiguous parcels and develop it by constructing apartment buildings. One parcel was owned by a Mr. and Mrs. Wilson with whom he had business relations and the other by the Department of Public Works. He apparently had an option to purchase the latter parcel.

Petitioner showed Mrs. Holzhauer, his law partner’s 77-year-old mother, a chart of all three parcels telling her he intended to divide the property into 12 sections and sell 12 shares in the property for $12,500 per share. Mrs. Holzhauer believed that if she invested in the property there would be other investors besides herself and petitioner.

Although two of the three parcels of land were still owned by the Wilsons and the Department of Public Works, petitioner represented he owned all three parcels. He offered to form a partnership with himself as a general partner and Mrs. Holzhauer as a limited partner, informing her he would prepare a partnership agreement for her signature. Mrs. Holzhauer’s son, and petitioner’s law partner, did not participate in these negotiations.

On two separate occasions, Mrs. Holzhauer gave petitioner funds taken from her personal savings totalling $25,000 for two “shares” in petitioner’s development. The first time Mrs. Holzhauer turned funds over to petitioner he gave her a receipt containing the notation, “Limited Partnership 2 shares ($12,500 each) Dominguez Real Estate Dev.” Dominguez Real Estate Development never existed. Petitioner did not place Mrs. Holzhauer’s $25,000 in a separate bank account. Instead, he deposited her money in three acounts of his wholly owned corporations