Friday, June 1, 2012

Attorney To Get License Pulled After $95K Client Ripoff; Cash Intended To Pay Off Civil Settlement

The State Bar of California recently announced:

  • The State Bar of California has accepted a stipulated disbarment from Newport Beach attorney Kendall R. Paulson, who misappropriated $95,000 that was supposed to be used to settle his client’s lawsuit.

  • According to the disbarment stipulation approved by the State Bar Court Wednesday, Paulson, 51, represented Carl Lovegren in a civil suit filed against him in Orange County Superior Court in September 2006. The following year, the parties entered into a settlement agreement whereby Lovegren agreed to pay the plaintiffs $95,000. The agreement stated that should Lovegren fail to pay an agreed-upon amount by Feb. 9, 2008, he would be responsible for twice the balance, plus interest.

  • On Dec. 10, 2008, Lovegren gave Paulson $40,000 to pay part of the settlement agreement, money that Paulson deposited into his client trust account but later spent. Paulson misappropriated an additional $55,000 in settlement money from another check Lovegren gave him in June 2009.

  • According to the stipulation, Paulson misled both Lovegren, who thought he had been paying off the settlement, and the court, by telling a judge that his client was trying to raise money to pay the judgment but needed more time.

  • Paulson (bar number 120688), who had no prior history of discipline, will be placed on involuntary inactive status May 18 until the California Supreme Court acts on the disbarment recommendation. He has agreed to pay restitution, plus interest.(1)

(1) Homeowners ripped off by the dishonest conduct of a California attorney (including a failure to refund unearned legal fees) who want to recover their money can apply for possible restitution from the Client Security Fund of the State Bar of California (see also Can the Client Security Fund Help You?).

For earlier posts referencing California's Client Security Fund in the context of loan modification ripoffs, see:

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:

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