Metropolitan News-Enterprise


Thursday, June 30, 2011


Page 1


S.C. Declines to Reconsider Disbarment of Arcadia Lawyer




The California Supreme Court yesterday declined to reconsider its order of last month disbarring an Arcadia lawyer who is also being prosecuted on charges of grand theft by embezzlement.

The justices, who held their weekly conference in San Francisco yesterday, denied without comment the rehearing petition by Ronald N. Gottschalk, 67, of Gottschalk & Associates. Gottschalk, a State Bar member since 1972, was ordered inactive last year after he failed to appear for trial in State Bar Court.

The Review Department found that the University of Michigan and Wayne State University Law School graduate had commited multiple acts of misconduct in connection with four separate client matters, two of which also formed the basis for criminal charges.

In addition to a variety of client trust account violations, the review panel said Gottschalk filed meritless or harassing claims and presented unwarranted claims or defenses, disrespected a  trial court, sought to mislead a trial court judge on two occasions, charged an unconscionable fee, failed to release client files, engaged in multiple acts of moral turpitude and lied to State Bar investigators.

A district attorney spokesperson said that an Aug. 4 pretrial conference is scheduled in the criminal case. Gottschalk was arrested in 2009 for allegedly misappropriating over $350,000 in client funds from 10 victims.

He is accused of pocketing $240,000 from settlement proceeds belonging to nine victims he represented in a civil lawsuit in 2007 and stealing approximately $118,000 from another client who had hired him to manage the estate of a deceased relative in 2005.

Other Actions

In other conference action, the justices:

Agreed to decide whether a defendant who claims he lacks the ability to pay a court-imposed fee forfeits the right to appeal by failing to object in the trial court. The Third District Court of Appeal held in People v. McCullough (2011) 193 Cal.App.4th 864 that the claim was forfeited, rejecting the defense contention that there was no forfeiture because the issue was one of sufficiency of the evidence.

Left standing an April 8 ruling by the Fourth District Court of Appeal’s Div. Three, which held that an insured who may be liable for reimbursement is not entitled to “sufficient” time to choose between assuming its own defense, allowing the company to settle the claim, or waiving a potential bad-faith claim.

In American Modern Home Insurance Company v. Fahmian (2011) 194 Cal.App.4th 162, the justices held that American Modern Home Insurance Company, which paid a $300,000 settlement to a worker injured on a residential construction project, was entitled to recover those amounts from its insured, builder Sohail Famiahn.

The insurer presented evidence that it notified Fahmian of his options, then settled a week later without having heard from him. In the interim, according to the testimony, the insurer’s coverage counsel spoke to Fahmian, e-mailed relevant documents, and offered to wait until the morning of the settlement deadline for his response.

Jury Verdict

An Orange Superior Court jury hearing American Home’s declaratory action found by special verdict that the policy did not cover the claim, that the company expressly told Fahmian that he could take over the defense or waive a bad-faith claim rather than have the company settle, and that he was given sufficient information to make an informed choice among those options.

The jury also found, however, that he was not given sufficient time to make his decision.

Court of Appeal Justice Richard Fybel, writing for the court, said the insurer was entitled to judgment, regardless of the last finding, because an insurer cannot be forced to allow the insured more time to decide than the plaintiff gives the insurer to accept the settlement offer.

Fybel rejected the argument that it was unfair to the insured to require him to make a decision on a complex set of options within a five-day timeframe. He noted that the insurer’s reservation of rights letter, sent months earlier, advised Fahmian of his right to seek advice of counsel regarding coverage, and that the company promptly notified Fahmian when it received the $300,000 demand from plaintiff’s counsel.


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