A Los Angeles attorney accused of stealing as much as $340,000 from his clients, some of it as recently as last November, this week was indefinitely barred from practicing law--more than 15 months after lawyers for the State Bar of California first sought to put him out of business.
In an order that takes effect today, a referee for the State Bar Court found that attorney Michael S. Kotzker, 41, lied to, cheated, evaded or stole money from 26 clients between 1981 and last year, and that as a result, Kotzker "poses a substantial threat of harm to his clients or the public."
That was a judgment that two other referees, who had considered Kotzker's case in February and October of last year, had been unwilling to make.
The order barring Kotzker from practice is not the only problem he faces. In a separate proceeding, another State Bar referee has recommended the lawyer's permanent disbarment, an action that is awaiting review by the state Supreme Court.
Questions on Checks
In two other matters, Kotzker, who lives in Phillips Ranch in eastern Los Angeles County, is due to make appearances in Los Angeles Municipal Court.
He has been asked to explain next Tuesday why two checks he wrote to satisfy terms of probation in an earlier business tax case were returned for insufficient funds. One check was made out to the court itself. And on May 31, Kotzker is scheduled to show up for a preliminary hearing on 17 charges of grand theft and one of felony forgery filed by the Los Angeles County district attorney's office in connection with alleged thefts from clients.
In ordering Kotzker to stop practicing law, State Bar referee Leon S. Paule concluded not only that the lawyer had harmed the public, but there was a "reasonable likelihood that the harm will reoccur or continue."
It was that conclusion that permitted Paule to bar Kotzker from further practice.
Kotzker's attorney, Richard L. Garrigues, said Friday that he will contest Paule's order, either with a State Bar review panel or with the state Supreme Court, contending that it contains "several serious errors." Of Paule, the lawyer said, "I don't think he was listening very closely."
In one instance, Garrigues said, the referee accepted as fact a former client's assertion that Kotzker had disposed of a case and kept a $2,500 settlement check. In fact, Garrigues said, "That case is not settled. There has never been any money on that case."
Kotzker, Garrigues said, did not have the opportunity to cross-examine several witnesses who presented declarations on which the referee in part based his order.
Garrigues said he believes that the State Bar Court is under increasing pressure from the state Legislature to aggressively pursue attorney discipline cases, and that Kotzker is a victim of that pressure. "The timing is terrible for him," Garrigues said.
Unlike judges who preside over criminal trials, the referees who hear the attorney discipline cases that come before the State Bar Court are themselves practicing attorneys who volunteer to sit a few days each month and receive no compensation.
File 11 Charges
State Bar lawyers first acted to put Kotzker out of business in January, 1987, after filing 11 disciplinary charges against him.
"He was following a pattern of accepting or negotiating injury case settlements without advising his clients, and then depositing the money in his trust account, and then spending it for his own purposes," said Gregory F. Bixler, a senior litigator for the State Bar.
At a hearing on Feb. 26, 1987, Kotzker took the stand in his own defense. He told referee Barbara E. Roberts: "Basically the emotional problems that I was going through at that time (in the early and mid-1980s) involved the death of both my parents, a divorce from a woman that I shouldn't have divorced to marry one who claimed to have a child by me and later told me that wasn't true. . . . These problems are now over."
Kotzker also told Roberts that he was paying back many of the clients from whom he had allegedly taken money.
'Under Enormous Stresses'
In her decision allowing Kotzker to continue to practice law, Roberts wrote that the lawyer "was under enormous stresses at the time these events began. . . . He is fully cognizant, however, of the errors he has committed and (is) remorseful."
State Bar lawyers moved against Kotzker again the following September, after they discovered that some of the clients Kotzker claimed to have repaid had not actually received the money. The lawyers also cited nine new complaints from additional clients.
Again, their request to prohibit Kotzker from practicing law was turned down. Referee Burton W. Popkoff wrote: "It cannot now be said with any degree of certainty that there is a reasonable likelihood that the harm caused by the respondent (Kotzker) will reoccur if he is permitted to continue the practice of law."
But, according to criminal complaints filed earlier this year by the district attorney's office, that is exactly what happened.
In November, 1987, the month after Popkoff issued his ruling, Kotzker allegedly persuaded a client for whom he had obtained a $13,000 settlement in a medical malpractice case to allow him to invest the money for her. Deputy Dist. Atty. Frederick G. Stewart, who is prosecuting Kotzker, said the lawyer promised the woman a return of 60% on her investment within 30 days. Instead, Stewart said, the woman never again saw her money. That allegation is the basis of one of the grand theft charges.
Allegedly Forged Checks
In another 1987 incident, Kotzker allegedly forged his clients' names on a $100,000 settlement draft from the City of Los Angeles, deposited the money into his own account, and spent it. In that case, Kotzker is accused of grand theft and forgery.
In interviews Friday, both Roberts and Popkoff said the State Bar attorneys had not met the legal standard of "clear and convincing" proof that Kotzker was likely to continue to do harm to his clients. "Hindsight is always 20-20," Roberts said.
In the charges filed by the district attorney's office, Kotzker is alleged to have stolen $339,484. He has pleaded not guilty and is free on bail.
Stewart said the district attorney's office is considering filing felony charges in connection with the 1987 check-writing incident. In that case, Stewart said, Kotzker as a condition of probation was ordered to pay a fine of $867 and back fees and taxes of $1,700 because he had failed to take out the required license to do business as an attorney in the city of Los Angeles.
Both Checks Bounced
Presenting evidence that he had written the checks, Kotzker persuaded a judge to dismiss the case, Stewart said. But both checks then bounced.
"It just seems outrageous that a lawyer should be hanging paper in the courthouse," Stewart said, using legal slang for the practice of writing checks without having sufficient funds to cover them.