Misappropriation of a client's settlement proceeds “is a most grievous breach of professional ethics and morality, and such conduct is certain to endanger the confidence of the public in the legal profession. The usual discipline imposed for such a breach is disbarment, in the absence of strong mitigating circumstances.” (Bradpiece v. State Bar (1974) 10 Cal.3d 742, 746-747 [111 Cal. Rptr. 905, 518 P.2d 337]; Cain v. State Bar (1979) 25 Cal.3d 956, 961 [160 Cal. Rptr. 362, 603 P.2d 464].)

Legal Standard

This court has repeatedly held that the misappropriation of client funds warrants disbarment in the absence of strong mitigating circumstances. (Rogers v. State Bar (1980) 28 Cal.3d 654, 658 [170 Cal. Rptr. 482, 620 P.2d 1030].) Leniency may be warranted where it appears that an attorney's misconduct is an aberrant episode, or where the misconduct is attributable to a specific cause which is itself no longer operative. (Lawhorn v. State Bar (1987) 43 Cal.3d 1357, 1365-1367.)

It is well established that misappropriation is a serious offense involving moral turpitude. (Alberton v. State Bar (1984) 37 Cal.3d 1, 15 [206 Cal. Rptr. 373, 686 P.2d 1177]; Chefsky v. State Bar (1984) 36 Cal.3d 116, 124 [202 Cal. Rptr. 349, 680 P.2d 82].) It merits severe discipline since it is “a gross violation of professional ethics which undermines the public's confidence in the legal profession.” (Ambrose v. State Bar (1982) 31 Cal.3d 184, 192-193 [181 Cal. Rptr. 903, 643 P.2d 486].) “Whatever the reason for an attorney's misconduct, our concern is and must be the protection of the public in the high duties of an attorney, the preservation of public confidence in the legal profession, and the maintenance of the highest professional standards for attorneys,” and these matters are our ultimate consideration. (Demain v. State Bar (1970) 3 Cal.3d 381, 387 [90 Cal. Rptr. 420, 475 P.2d 652].)

“The State Bar Court exercises statutory powers under Business and Professions Code sections 6101 and 6102 with respect to the discipline of attorneys convicted of crimes.” (Cal. Rules of Ct., Rule 9.10(a).) The State Bar's recommendation as to discipline is entitled to great weight (Goldman v. State Bar (1977) 20 Cal.3d 130, 140 [141 Cal. Rptr. 447, 570 P.2d 463]). Its findings are viewed with “great deference, particularly when based on evaluations of credibility.” (Maltaman v. State Bar (1987) 43 Cal.3d 924, 932.)

“The Supreme Court will order review of a decision of the State Bar Court recommending disbarment or suspension from practice when it appears:

1. Necessary to settle important questions of law;
2. The State Bar Court has acted without or in excess of jurisdiction;
3. Petitioner did not receive a fair hearing;
4. The decision is not supported by the weight of the evidence; or
5. The recommended discipline is not appropriate in light of the record as a whole.”

(Cal. Rules of Ct., Rule 9.16(a).)

The imposition of attorney discipline does not issue from a fixed formula but from a balanced consideration of all relevant factors, including mitigating circumstances. (Schneider v. State Bar (1987) 43 Cal.3d 784, 798 [239 Cal. Rptr. 111, 739 P.2d 1279].) The “court exercises its independent judgment in determining the appropriate discipline.” (Smith v. State Bar (1984) 37 Cal.3d 17, 25 [206 Cal. Rptr. 545, 687 P.2d 259].)

The court “gives great weight to the disciplinary recommendation of the State Bar. It is axiomatic that petitioner bears the burden of demonstrating that the State Bar's recommendation is erroneous.” (Smith v. State Bar (1984) 37 Cal.3d 17, 25 [206 Cal. Rptr. 545, 687 P.2d 259].) In meeting this burden, the petitioner must demonstrate that the charges of unprofessional conduct are not sustained by convincing proof and to a reasonable certainty. (Reznik v. State Bar (1969) 1 Cal.3d 198, 201-202.) All reasonable doubts will be resolved in favor of the accused and if equally reasonable inferences may be drawn from a proven fact, the inference which leads to a conclusion of innocence rather than one leading to a conclusion of guilt will be accepted. (Id.)

“When the findings... rest primarily on testimonial evidence, [the court is] reluctant to reverse the decision of the local administrative committee, which was in a better position to evaluate conflicting statements after observing the demeanor of the witnesses and the character of their testimony.” (Zitny v. State Bar, supra, 64 Cal.2d 787, 790; in accord, Lee v. State Bar, 2 Cal.3d 927, 940 [88 Cal. Rptr. 361, 472 P.2d 449]; Bernstein v. Committee of Bar Examiners, 69 Cal.2d 90, 101-102 [70 Cal. Rptr. 106, 443 P.2d 570].) The hearing panel is best suited to resolving credibility questions, because it alone is able to observe the witnesses' demeanor and evaluate their veracity firsthand. (Galardi v. State Bar (1987) 43 Cal.3d 683, 690 [238 Cal. Rptr. 774, 739 P.2d 134].) Against this backdrop, the petitioner must demonstrate that the findings are not sustained by convincing proof and to a reasonable certainty. (Galardi, supra, 43 Cal.3d at p. 689.) Merely repeating conflicts in the evidence does not satisfy this burden. (Tarver v. State Bar (1984) 37 Cal. 3d 122, 132 [207 Cal. Rptr. 302, 688 P.2d 911].)

Procedure

“The Supreme Court may include in an order disbarring or suspending a licensee of the State Bar, or accepting his or her resignation, a direction that the licensee must, within such time limits as the Supreme Court may prescribe:

1. Notify all clients being represented in pending matters and any co-counsel of his or her disbarment, suspension, or resignation and his or her consequent disqualification to act as an attorney after the effective date of the disbarment, suspension, or resignation, and, in the absence of co-counsel, also notify the clients to seek legal advice elsewhere, calling attention to any urgency in seeking the substitution of another attorney or attorneys;
2. Deliver to all clients being represented in pending matters any papers or other property to which the clients are entitled, or notify the clients and any co-counsel of a suitable time and place where the papers and other property may be obtained, calling attention to any urgency for obtaining the papers or other property;
3. Refund any part of fees paid that have not been earned; and
4. Notify opposing counsel in pending litigation or, in the absence of counsel, the adverse parties of the disbarment, suspension, or resignation and consequent disqualification to act as an attorney after the effective date of the disbarment, suspension, or resignation, and file a copy of the notice with the court, agency, or tribunal before which the litigation is pending for inclusion in the respective file or files.”

(Cal. Rules of Ct., Rule 9.20(a).)

Review of Recommendation of Disbarment or Suspension

“A petition to the Supreme Court by a licensee to review a decision of the State Bar Court recommending his or her disbarment or suspension from practice must be served and filed within 60 days after a certified copy of the decision complained of is filed with the Clerk of the Supreme Court. The State Bar may serve and file an answer to the petition within 15 days after filing of the petition. Within 5 days after filing of the answer, the petitioner may serve and file a reply. If review is ordered by the Supreme Court, the State Bar must serve and file a supplemental brief within 45 days after the order is filed. Within 15 days after filing of the supplemental brief, the petitioner may serve and file a reply brief.” (Cal. Rules of Ct., Rule 9.13(a).)

A petition to the Supreme Court “must be verified, must specify the grounds relied upon, must show that review within the State Bar Court has been exhausted, must address why review is appropriate under one or more of the grounds specified in rule 9.16, and must have attached a copy of the State Bar Court decision from which relief is sought.” (Cal. Rules of Ct., Rule 9.13(e).)

“All petitions, briefs, reply briefs, and other pleadings filed by a petitioner under this rule must be accompanied by proof of service of three copies on the General Counsel of the State Bar at the San Francisco office of the State Bar, and of one copy on the Clerk of the State Bar Court at the Los Angeles office of the State Bar Court. The State Bar must serve the licensee at his or her address under Business and Professions Code section 6002.1, and his or her counsel of record, if any.” (Cal. Rules of Ct., Rule 9.13(f).)