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Bar Counsel Report: April 2013

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bar counsel report
April 2013
SUPREME COURT OF NEVADA
In re: David K. Arase Docket No.: 59717 Filed: February 22, 2013 ORDER OF APPROVING CONDITIONAL PLEA AGREEMENT AND ENJOINING ATTORNEY FROM PRACTICING LAW IN NEVADA
California attorney enjoined from practicing in Nevada for three years after he failed to perform work on behalf of Nevada clients regarding their foreclosures and/or short sales. This is an automatic review of a Southern Nevada Disciplinary Board hearing panel’s recommendation that we approve California attorney David K. Arase’s conditional guilty plea agreeing to an injunction prohibiting him for practicing law in Nevada.1 See SCR 113(1), (3); SCR 105(3)(b). Arase, who is not licensed to practice law in Nevada, was affiliated with a non-attorney company advertising foreclosure and short sale related legal services nationwide. Several Nevada homeowners contacted the company, and the company referred these Nevada clients to Arase. He accepted and retained these Nevada clients, but failed to perform work on their behalves. When contacted by the State Bar of Nevada, it is alleged that Arase claimed he was affiliated with a Nevada-licensed attorney, when he was not. Under the plea agreement, Arase admitted to the following ethical violations: RPC 1.1 (competence); RPC 1.3 (diligence); RPC 1.5 (fees); RPC 4.1 (truthfulness in statements to others); RPC 5.5 (unauthorized practice of law); RPC 7.1 (communications concerning a lawyer’s services); RPC 7.2(k) (advertising); and RPC 7.5A (registration of multijurisdictional law firms).2 The agreement provides for a three-year injunction from the practice of law in Nevada, wherein Arase is prohibited from working in Nevada or accepting Nevada clients or matters related to foreclosures, loan modifications or residential real estate. The agreement also provides that if Arase seeks to practice again in Nevada after the term of the injunction, either pro hac vice or as an applicant to our state’s bar, he must disclose the instant case in any application. Further, he is required to pay the costs of the disciplinary proceedings within 30 days. After reviewing the record of the instant disciplinary proceedings, we approve the conditional plea agreement in its entirety.3 See SCR 113(1). Therefore, Arase is hereby enjoined from the practice of law in Nevada for three years from the date of the filing of this order. This injunction includes all areas of legal practice, including foreclosures, loan modifications and any matter dealing with residential real estate. We further require that, should Arase wish to
ever practice law in Nevada again, either as a Nevada attorney or pro hac vice, he disclose this instant disciplinary matter in any applications he may submit to this court or the State Bar of Nevada. Finally, Arase must pay the costs of the disciplinary proceedings within 30 days from the date of this order. It is so ORDERED.
SOUTHERN NEVADA DISCIPLINARY BOARD
PUBLIC REPRIMAND In re: Ronald N. Serota Bar No.: 7904 File No.: SG12-0103 Filed: January 23, 2013
Public Reprimand imposed when suspended attorney engaged in the unauthorized practice of law. TO: RONALD N. SEROTA On November 18, 2009, the Supreme Court of Nevada (Supreme Court) temporarily suspended you from the practice of law due to your admitted misappropriation of approximately $319,000 from your trust account. Your suspended status prohibits you from holding yourself out as an attorney, as such conduct constitutes the practice of law pursuant to Rule of Professional Conduct (RPC) 5.5(d) (2)(iii) (Unauthorized Practice of Law). On December 8, 2011, you filed a proper person complaint in the United States District Court for the District of Nevada titled Ronald N. Serota, Esq. v. Desert Cab, Inc., et al., Case No. 2:11-cv0196. A caption on the first page of the complaint stated “Ronald N. Serota. Attorney at Law, Nevada Bar No. 007904.” Further, the signature page of the complaint contained the caption Ronald Serota, Esq., Bar No. 7904. Your complaint did not disclose that your license was suspended. You also filed a First Amended Certificate of interested Parties on December 12, 2011. This certificate also listed “Ronald N. Serota, Attorney at Law, Nevada Bar No. 007904.” The signature page for both the certificate and the Certificate of Mailing indicated “RONALD N. SEROTA, ESQ., Nevada Bar # 007904.” You did not disclose anywhere in either certificate that your license was suspended. On December 21, 2011, you sent a letter regarding your complaint to Susan Martinovich, Director of the Nevada Department of Transportation (NDOT). Martinovich is not an attorney. The letterhead on your letter, dated
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bar counsel report
April 2013
December 20, indicated “Ronald N. Serota, Esq.” with no disclaimers regarding your suspended status. The signature block on your letter of December 20 also indicated “Ronald N. Serota, Esq.” with no disclaimers indicating your suspended status. Your letter was forwarded by Martinovich to Dennis Gallagher, Chief Deputy Attorney General. Gallagher realized that your license was suspended after researching your name on the “Find a Lawyer” section of the state bar’s website and Gallagher thereafter submitted his letter to the state bar. You acknowledged that the conduct described above violated the Rules of Professional Conduct detailed below, but noted that your conduct was negligent rather than Intentional. You also noted that In December 2011, you disclosed your suspended status to the federal district court in a motion seeking to ascertain whether you could continue using the electronic filing account that you were assigned while permitted to practice law. In light of the foregoing, you violated RPC 4.1 (Truthfulness in Statement to Others); RPC 5.5 (Unauthorized Practice of Law); RPC 7.1 (Communication Concerning a Lawyer’s Services); and RPC 7.5 (Firm Names and Letterheads); and are hereby PUBLICLY REPRIMANDED.
Nevada Rule of Professional Conduct 1.4 (Communication) requires a lawyer to keep the client reasonably informed regarding the status of their case and promptly comply with reasonable requests for information. In this instance, an attorney should have taken the time to keep Client apprised regarding the status of distribution of her settlement funds. Nevada Rule of Professional Conduct 1.15 (Safekeeping Property) requires an attorney to protect a client’s settlement funds and take reasonable measures to timely distribute settlement funds. In this matter, it took Attorney more than four years to distribute the settlement funds. Lastly, Nevada Rule of Professional Conduct 8.1(b) states that a lawyer shall not knowingly fail to respond to a demand for information from a disciplinary authority. In this matter, Attorney failed to adequately respond to the state bar regarding the status of the distribution of Client’s settlement funds and, in fact, misrepresented to the state bar that Client’s settlement funds were being maintained in the trust account. Accordingly, Attorney was REPRIMANDED for having violated Rules of Professional Conduct (RPC) 1.4 (Communication); RPC 1.15 (Safekeeping Property); and 8.1 (Bar Admission and Disciplinary Matters).
LETTERS OF REPRIMAND File No. SG10-0917
Letter of Reprimand appropriate when attorney failed to promptly distribute settlement funds. Client retained Attorney to represent her in a personal injury matter following an accident in April 2004. Attorney settled her claim in April 2007 for $10,000. In April 2008, Client complained to the State Bar of Nevada that Attorney was improperly holding her settlement funds and was not acting diligently to finalize the distribution. Attorney responded that the money was being retained in his attorney trust account until he could resolve a subrogation lien with Medicare. Based on his representation, a prior screening panel dismissed the initial grievance in July 2008. On November 19, 2010, Client sent another grievance letter to the state bar stating that she still had not received her settlement funds. In Attorney’s response, he indicated that he was unaware that the funds had not been distributed and that upon obtaining the file from storage, he noticed that the settlement check was still in the file and had gone stale. Attorney subsequently contacted the insurance company and had a new check issued which was dated April 18, 2011. Attorney also resolved the remaining lien and provided a signed disbursement from Client and a copy of a check to her dated August 24, 2011.
File No. SG11-0809
Letter of Reprimand appropriate when attorney failed to adequately account for a retainer. Client submitted a grievance to the state bar containing allegations of professional misconduct by Attorney. Client retained Attorney in November 2007 to represent his business. Client gave Attorney a $5,000 retainer for future work. Client provided a copy of the $5,000 check and a billing invoice printed from Attorney’s letterhead. The billing invoice was dated March 31, 2009, and was addressed to Client’s other business, Client, Inc. The fee was for “receipt and review complaint; conference with Client.” The charge was $350. Client stated that he attempted to get the balance of his retainer from Attorney and provided a copy of a letter dated May 9, 2009, that stated the balance of $4,650 should be returned to him immediately. The letter acknowledged the March 2009 invoice and that the $350 “will cover services provided to Attorney and leave me with $4,650 return on my initial retainer.” Client alleged that he had not had any contact with Attorney after that letter was sent. Attorney responded to the state bar stating that the case appeared to be a fee dispute and requested that the matter be dismissed and referred to the Fee Dispute Committee.
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Attorney alleged that he did not receive Client’s letter but that significant work was performed despite Client’s allegation to the contrary. Attorney stated that he did not have the invoices but reviewed corporation documents for business and documents for other corporations at Client’s request. Client responded to Attorney’s letter by stating that business and Client, Inc. are two separate entities and not one entity. The state bar sent a letter to Attorney requesting that Attorney provide information as to where the $5,000 retainer was deposited and a copy of the retainer agreement. On September 23, 2011, Attorney responded by stating that the check went into his general account because, “it is not my practice to deposit initial retainers into the trust account unless they are a very large amount and a long lead time for work is envisioned.” Attorney did not have Client’s retainer agreement but provided a “form retainer agreement” that is used by Attorney’s office. The retainer agreement does not state that the retainer is earned immediately or that it will not be held in a trust account. Further, the retainer agreement states that a monthly billing invoice will be sent to the client. A month later, Attorney supplemented his response to the state bar by stating that additional work was found that he performed for Clients regarding researching a limited liability company and preparing the Articles of Organization and Initial List of Managers and Resident Agent. This was done in January 2008. Attorney also referenced a consulting agreement between business and another corporation. While the panel agreed that whether or not Attorney
earned his fee is a fee dispute issue, the fundamental misapprehension about safekeeping property and how Attorney handled Client’s retainer warranted discipline. Attorney did not provide Client’s retainer to the state bar but the form retainer agreement stated that monthly billing will be billed against the retainer and an invoice will be prepared each month. It does not state that the retainer is a flat fee. Therefore, the retainer must be held in a trust account. Accordingly, Attorney was REPRIMANDED for the violation of the Rule of Professional Conduct 1.15 (Safekeeping Property). This matter will also be referred to Fee Dispute.
1. Arase was, at all times pertinent to this matter, licensed to practice law in California. He has never been a licensed attorney in Nevada. Nonetheless, this court has jurisdiction to impose discipline on Arase, regardless of the fact he s not a member of the State Bar of Nevada. See SCR 99(1); Matter of Discipline of Droz, 123 Nev. 163, 167-68, 160 P3d 881, 884 (2007). 2. In exchange for this plea, the following alleged ethical violations were dismissed: RPC 8.1(a) (bar admission and disciplinary matters/making a false statement): RPC8.1(b) (bar admission and disciplinary matters/failure to correct a misapprehension) and RPC 8.4 (misconduct). 3. Our approval rests on the fact that Arase refunded all retainer fees received from Nevada clients without intervention from the State Bar of Nevada or the courts. Further, of the five Nevada clients Arase represented, none of them filed an individual complaint against him.
DISCIPLINE KEY
Resignation with charges pending: SCR 98(5)(b) Types of possible discipline listed generally: SCR 102 Attorneys convicted of crimes: SCR 111 Conditional guilty plea agreements (discipline by consent): SCR 113 Reciprocal discipline: SCR 114 Disbarred/Suspended attorneys: SCR 115 Reinstatement: SCR 116 Disability Inactive: SCR 117 Supreme Court Rules (SCRs): www.leg.state.nv.us/CourtRules/SCR.html
DISBARMENT – License to practice revoked. SUSPENSION – License suspended for a time certain, ineligible to practice. More than six months requires petition for reinstatement and court order. DISABILITY INACTIVE – Ineligible to practice until further order of the court. In the interim, disciplinary proceedings held in abeyance. INTERIM TEMPORARY SUSPENSION – Interim suspension based on showing of a substantial threat of serious harm to the public, in effect until further court order, usually after hearing. RESIGNATION WITH CHARGES PENDING – Ineligible to practice. Requires Bar Counsel approval. Resignation is irrevocable, with readmission only possible upon application as a new admittee. PUBLIC REPRIMAND – Misconduct found and public censure issued, including attorney’s name and the underlying facts and charges. Published in Nevada Lawyer and made available to the press. Remains eligible to practice law. LETTER OF REPRIMAND – Lowest level of discipline. Not published, but disclosed upon request under the new rules. May also include up to a $1,000 fine and restitution. Remains eligible to practice. ADMINISTRATIVE SUSPENSION – Attorneys may be administratively suspended for failure to pay bar fees (SCR 98(12)), and/or for failure to complete and report the required Continuing Legal Education hours (SCR 212). While these are not disciplinary suspensions, the attorney is ineligible to practice law until the deficiency is remedied and the procedures to transfer back to active status completed as set forth in the applicable rules.
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