## Facts

- Robert L. Beery, a California attorney admitted in 1965 with no prior discipline, performed legal work for Richard Coss and Coss’s business, including incorporation and representation in a dispute with the state.
- After Coss suffered a catastrophic accident in 1975 and became paraplegic, Coss retained Beery and two of Beery’s associates to pursue a contingency personal injury action.
- The personal injury matter later settled in 1979 and 1980 for approximately $250,000, with Coss receiving about $150,000.
- During the period of representation, Beery entered into a business transaction involving Coss’s funds.
- The State Bar Court found an attorney–client relationship existed at the time of the transaction and concluded Beery failed to meet the heightened fiduciary duties governing business transactions with clients, including adequate disclosure and fairness.
- The State Bar Court recommended five years’ suspension (stayed), five years’ probation, three years’ actual suspension, and restitution of $35,000.
- Beery sought review, disputing the existence of an attorney–client relationship, the findings of rule and statutory violations, and the severity of the recommended discipline.

## Issues

1. Whether substantial evidence supported the finding that an attorney–client relationship existed between Beery and Coss when the business transaction occurred.
2. Whether Beery’s conduct violated former California Rules of Professional Conduct 5-101 and 5-102 and Business and Professions Code sections 6103 and 6106.
3. Whether the recommended discipline was appropriate in light of the misconduct and mitigating and aggravating circumstances.

## Decision

- The California Supreme Court independently reviewed the record while giving great weight to the State Bar Court’s factual findings and disciplinary recommendation.
- The Court sustained the State Bar Court’s findings that an attorney–client relationship existed and that Beery’s conduct violated former rules 5-101 and 5-102.
- The Court sustained findings of willful violation of professional duties under Business and Professions Code section 6103 and moral turpitude under section 6106.
- The Court imposed five years’ suspension with execution stayed and five years’ probation, requiring restitution of $35,000.
- The Court modified the recommendation by reducing the period of actual suspension from three years to two years (and until restitution was made).

## Legal Principles

- In attorney discipline, the Supreme Court exercises independent judgment but accords great weight to the State Bar Court’s findings, particularly on credibility and factual determinations.
- The existence of an attorney–client relationship turns on substance and reasonable expectations arising from the parties’ dealings, not formal labels.
- A lawyer entering a business transaction with a client must act with the utmost good faith and fairness and must make full disclosure of conflicts and risks and ensure the client has a meaningful opportunity to seek independent counsel.
- A self-interested transaction with a client, particularly a vulnerable client, undertaken without strict compliance with fiduciary duties can support discipline for conflicts of interest and for conduct involving moral turpitude and willful breach of professional duties (Bus. & Prof. Code §§ 6103, 6106).
- Restitution and significant actual suspension may be imposed when misconduct involves substantial client funds and breach of fiduciary obligations.

## Conclusion

The California Supreme Court found that Beery engaged in a conflicted business transaction with a client without meeting required fiduciary safeguards, warranting serious discipline; it largely adopted the State Bar Court’s recommendation but reduced the actual suspension to two years while retaining restitution and probation conditions.


Beery v. State Bar, 43 Cal. 3d 802 (Cal. 1987)