Wednesday, June 15, 2005
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Court of Appeal Upholds Denial of Real Estate License To Attorney Disbarred for Fraud and Excessive Billing
By a MetNews Staff Writer
The state may treat the disbarment of an attorney as proof of unfitness to hold a real estate license, the Third District Court of Appeal ruled yesterday.
The court upheld an order of the Department of Real Estate denying Bernard Jerome Berg’s application for a real estate license, which was based on Berg’s disbarment for excessive and fraudulent billing. Both the DRE and the court rejected Berg’s contention that the disbarment proceedings were unfair and should not be treated as proof of misconduct.
Berg, of San Francisco, practiced from 1959 until 1996, when he was placed on involuntary inactive status. He was disbarred in 1998.
The disbarment stemmed in part from his activities as Cumis counsel in 41 dental malpractice actions. Dentists Insurance Company, which represented all of the insureds, sued in 1988, accusing Berg of “bulk billing”—charging for three minutes of attorney time for every page of material received, whether he actually reviewed it or not, resulting at times in billings for more than 24 hours of a single day.
Disciplinary Proceedings
A jury awarded more than $280,000 to the insurer. The State Bar brought disciplinary proceedings based on that case, along with allegations that Berg collected a 40 percent contingency fee in a tort case despite the fact that the case settled before trial and the written fee agreement provided for a one-third contingency fee in that event, and that he withdrew that amount from his trust account over the client’s written objection.
When Berg applied for a real estate license in 2002, an administrative law judge found on the basis of the disbarment and the civil judgment in the insurance case that he had engaged in “fraud or dishonest dealing” and was thus not entitled to a real estate license.
In doing so, the ALJ held that the disbarment proceeding afforded due process, and that it constituted a finding of illegal conduct by a state agency, precluding a collateral attack on the final order. The ALJ also found that Berg, ostensibly employed as a law clerk, had practiced law following disbarment, and showed a lack of remorse, and that the issuance even of a restricted real estate license would be contrary to the public interest.
The Department of Real Estate adopted the ALJ’s findings and recommendation, and Justice Fred Morrison, writing yesterday for the Court of Appeal, said it relied on substantial evidence and made no error.
Preclusive Effect
The justice rejected the contention that State Bar Court proceedings should not have the same preclusive effect as administrative agency proceedings. The bar court’s proceedings are unfair, Berg argued, because judges do not have tenure and may be removed without cause and there is no full judicial review with oral argument and a written judicial opinion.
Nothing in the state or federal constitution, however, requires judicial tenure as a condition of due process, Morrison noted. And the California Supreme Court, he added, has ruled that the availability of discretionary review of State Bar Court decisions is sufficient to satisfy due process.
The justice also rejected the argument that the State Bar proceedings did not result in an express finding that Berg had violated a law.
“Although the State Bar Court findings are not binding on the Supreme Court, the Supreme Court may adopt them,” the justice explained. “In this case, it did so by summary denial of Berg’s petition for review....The State Bar Court found Berg violated Business and Professions Code section 6106, and former rule 2-107 and rule 4-100(A)(2) of the Rules of Professional Conduct. The Review Department found he also violated rule 4-100(B)(4) of the Rules of Professional Conduct. The requirement of ‘an express finding of violation of law by the agency or entity’ was met.
The case is Berg v. Davi, C046809.
Copyright 2005, Metropolitan News Company