Townsend v. State Bar

PRESTON, J.

By this proceeding petitioner is accused of an infraction of subdivision 4 of section 287 of the Code of Civil Procedure, in that, being an attorney at law, he loaned his name to be used as attorney and counselor by other persons who were not licensed attorneys.

The charge grows out of petitioner’s relation to two individuals, Gussaroff and Levy, brothers-in-law, licensed as adjusters under the state law and doing business under the name of Standard Adjustment Organization. This concern during the year 1928 and at all times herein involved, was engaged in the business commonly known as “ambulance chasing”; it maintained an office and staff of assistants in the Metropolitan Building, Los Angeles. It actively solicited contracts of employment from persons who had received personal injuries as a result of automobile accidents and from other causes, where the party causing the injury was indemnified against loss by insurance.

These contracts authorized the adjusters to take all necessary steps to enforce collection of the claims, such as employing attorneys and instituting suits for that purpose. Their compensation was a percentage of the amount recovered, whether by suit or adjustment. To this end they usually caused suit to be instituted in the name of the injured party against the party causing the injury and during the pendency of the action diligent efforts would be made to adjust and compromise the claim with the indemnitor insurance company. The assiduity in behalf of settlement would doubtless be stimulated by the fact that the adjusters often advanced small sums to injured parties to meet their immediate necessities. Being engaged in work which required as a rule the commencement of litigation, the adjusters and their staff became proficient in the practice of the law in this class of cases. Legal blanks of all kinds were - provided and a stock set of forms of complaints was always on hand. The firm here involved had a business connection with some four or more attorneys.

[364]

Petitioner became associated with the concern in February, 1928, and remained with them until September, 1928. He drew a salary of one hundred dollars a month with an added fee of fifteen dollars for the presentation of a demurrer or motion and twenty-five dollars for an actual trial. He had a regular office in the Douglas Building, Los Angeles. Nevertheless, the legal blanks and covers issuing from the office of said adjusters bore thereon petitioner’s name with the address of the concern as his address. The necessary result of this act was that all persons desiring to communicate with petitioner would seek him at the office of the adjusters and invariably some member of the organization would attend to the matter without the aid and usually without the knowledge of petitioner. This plan was designed especially to promote the carrying on of the causes in court by the adjusters instead of by petitioner.