Wednesday, August 6, 2008
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Court Rejects Challenges to Rulings by Encino Attorney Wolf
By STEVEN M. ELLIS, Staff Writer
This district’s Court of Appeal yesterday rejected challenges by Encino attorney Mervyn H. Wolf to the State Bar’s finding that he improperly withheld trust funds from one former client, and to a judgment that he committed malpractice against another.
One panel of Div. Two held in an unpublished opinion that substantial evidence supported the State Bar Client Security Fund Commission’s findings against Wolf, and that the commission afforded him due process when it served him at his State Bar membership address of record.
Similarly, a panel sharing two of the same justices held in an unpublished opinion that Wolf’s purported trouble focusing on personal matters in the two months leading up his July 10, 2006 placement on involuntary inactive status did not excuse his earlier failure to respond to a malpractice action. The panel also held that his failure to provide an adequate record waived his challenge to damages awarded under a subsequent default judgment .
Wolf, an attorney for 40 years, currently faces a Sept. 4 trial on five felony counts of embezzling clients’ settlement funds. He is accused of having taken settlement funds from his clients in multiple personal injury, workers’ compensation, and wrongful termination cases between June 2003 and June 2004, and allegedly deposited settlement checks into his clients’ trust accounts before embezzling the funds.
Disciplinary Contacts
Prior to his placement on involuntary inactive status in July 2006, he had extensive contacts with the disciplinary system, having been placed on three years’ probation in 1995 for misconduct in three matters, suspended 45 days in 1998 for failing to comply with a condition of the earlier probation, placed on inactive status for a month in 2002 for failure to comply with MCLE requirements, and served a month on suspension in 2004 for nonpayment of bar dues.
In the first of the two opinions, the court addressed a finding by the commission that Wolf had failed to release $45,128.44 in client trust funds to Carleen Olmstead, a former client in a personal injury matter.
The commission had mailed Olmstead’s claim for reimbursement from the Client Security Fund on Wolf at his official State Bar membership address, and—when he failed to respond—had mailed to the same address a notice of its tentative decision that Wolf had wrongfully retained the funds.
One month later the commission mailed a notice of final decision to the same address. This time Wolf responded, asking that the decision be set aside on the basis that he had never received copies of Olmstead’s claim or the tentative decision.
However, Wolf took no action for almost a year, and then filed a petition for a writ of mandate which was dismissed when he failed to appear for trial
Failure to Appear
Wolf similarly failed to appear at trial on a second petition, and Los Angeles Superior Court Judge David P. Yaffe—noting that Wolf had appeared in a previous proceeding in which notice had been waived—denied the petition, concluding that the evidence provided by Olmstead supported the commission’s findings.
Writing for the Court of Appeal, Justice Kathryn Doi Todd agreed that the evidence substantially supported the commission’s findings, and rebuffed Wolf’s contention that he was denied due process.
“[Wolf] had three opportunities to be heard on the claim against him, but no substantive opposition was ever presented…,” she wrote. “There is nothing that [the commission] or anyone else did that interfered in any way with [his] due process rights.”
Presiding Justice Roger W. Boren and Justice Victoria M. Chavez joined Doi Todd in her opinion.
In the second case, in which Doi Todd was joined by Chavez and by Justice Judith M. Ashmann-Gerst, the Court of Appeal addressed Wolf’s argument that Los Angeles Superior Court Judge Judith C. Chirlin erred when she denied his motion to set aside a default judgment arising from his failure to respond to a malpractice complaint by former client Ararat Badalian.
Wolf contended that the State Bar’s May 2006 notice of his imminent suspension left his practice in shambles and him unable to effectively function “as a husband and a man,” and that this impairment excused his failure to respond. In support, he cited a declaration that contained testimony by his psychiatrist, but which had never been filed with the trial court.
But Doi Todd, noting that service of the summons and complaint predated the State Bar’s notice, agreed with Chirlin that Wolf had not demonstrated “debility at the relevant time.”
She also concluded that Wolf had waived any challenge that the damages awarded to Badalian were excessive or unsupported by the evidence, writing that Wolf’s failure to provide a copy of the transcript of the default hearing left the court without an adequate record to review his challenge.
When contacted by the MetNews, Wolf indicated that he had not yet reviewed the opinions.
However, Woodland Hills attorney Marc Appell—who argued on Wolf’s behalf in the malpractice case only—disagreed with Doi Todd’s conclusion that the record was insufficient to review the damages award.
Appell said that he needed to conduct further research to determine whether the transcript did provide evidence to support the award, but maintained his belief that it did not.
Badalian’s counsel, San Marino attorney Charles T. Mathews, called the decision a “great win for consumers,” and a necessary step in policing the profession to hold attorneys accountable for taking advantage of clients and betraying their trust.
Counsel for the State Bar could not be reached for comment.
The cases are Wolf v. State Bar of California, B198608, and Badalian v. Wolf, B200501.
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