FILED Ellen A. Pansky (SBN 77688) ‘art Barsepyan [SBN 279064) PANSKY MARKLE ATTORNEYS AT LAW JUN 20208, 1010 Syeamore Aven Sute 308 South Pasadena, CA”91030 ee Telephone: (213) 36-7300 Facsimile: (213) 626-7330 ‘UO ANGELES: Atoreys for Respondent Michael Avena, sq BEFORE THE STATE BAR COURT OF THE STATE OF CALIFORNIA HEARING DEPARTMENT ~ LOS ANGELES Inthe Maner of Case Nos. SBC 19-TE-30259 RESPONDENT'S OPPOSITION TO MICHAEL JOHN AVENATTL APPLICATION FOR INVOLUNTARY INACTIVE ENROLLMENT; DECLARATION OF MICHAEL ‘Member No. 204929, AVENATTI [Rules of Procedure, rule 5.225 er seg; Bus. & |A Member of the State Bar. Prof Code § €0070)2)] Status Conf: June 24,2019 a 10:30 am. RESPONDENT'S OPPOSI TO APPLICATION FOR INVOLUNTARY INACTIVE ENROLLMENTRespondent Michael Avenat,by and through his counsel, Pansky Markle Attorney at Law, opposes the State Bar's Coreced Application for Involuntary Inatve Enrollment (“Application”) pursuant to Business and Professions Code, section 6007(¢)2) and Rules of Professional Conduct, rue 5.225 et seg filed June 5, 2019, because the Sate Bar has failed to demonstrate that Respondent poses a substan treat of harm to his cients othe public 1. INTRODUCTION ‘The Application i based on asseons of misappropriation of lint funds, misreprsenaton to a client, and flue to account ina single liom mater, in adition to the fact that criminal charges are ‘ending aginst Respondent for mates involving allegations of extortion and embezzlement Importantly, nome ofthe allegations made by Gregory Bare.’ the complainam inthe Sie Bar's disciplinary proceeding or the allegarions inthe pending criminal proceedings, has been proven tobe re. Due to the pening eximinal proceedings referenced in the State Bar's Applicaton, Respondent's files, records, computes, mobile devices and electronic data were seized by law enforcsment, Despite multiple requests for abcess, Respondent has not been permite access to his files and records sufficient to presently permit him to respond with particulaity to most ofthe State [Bar's Factual allegations, Thus, Respondent's herein responses to the allegations in the Application are based on limited curent eclletion and willbe augmented once he is permited acces to his relevant files and recon, including text messages, cml, client accounting documents, ce Respondent sdmis that he represented Barcla commencing in July 2014, in an intellectual property case (the “IP Mater"), which sete afer years of itgaton with Boel’ written approval {or $1.9 million. Respondent also represented Mr. Brea in other matters, which required significant legal services during te years 2016 0 2019, Respondent furtber assent that he properly dsebuted the settlement proceeds in the IP Matter. Respondent denies that he misappropriated client funds; the "The cvdence wil show hat Mr Bares redibilti severely lacking and that he has a nat native sory of ‘sbrcaton a fl “fet” 1 TBESPONDENT'S OPPOSITION TO APPLICATION FOR INVOLUNTARY INACTIVE ENROLLMENToust of funds he recived in connection with representing Bare constituted eared fes and costs for legal services proved to Barca for services provided in conneston with the IP Matter and other legal services provided to Barela. Respondent further denies that he made material msrepesenatons to Barelaor that he failed to aesount to Barela The facut alegations on which the State Bar lis in suppor ofits Application are inaccurate andlor woefully incomplete. ‘The evidence isnot clear and convincing that Respondent engaged i imentional misappropriston or that he caused or continues to cause substantial harm to clients or the public Regardless of Respondent's notoriety, there is nothing significantly unusual about this ease that differentiates jt from other disciplinary matters in which the State Bar alleges misappropriation of lien funds. Respondent does not pose a threat to clients or the public. The Application for Respondent to be involuntarily enrolled inactive isnot warranted, I. ARGUMENT ‘The State Bar has fail to demonstrated by clear and convincing evidence that Respondent poses substantial harm to clients the public, and should not be placed on involuntary native enollment pursuant to Business and Professions Code § 600702). Aste evidence tobe presented will sho, although the Sate Bar may be able to prove some level of minor misconduct is aot reasonably likely to prevail on its allegations of substantial dishonest misappropriation of elient funds warranting disbarment. In its Application the State Bar ites to disciplinary authorities of Palomo v. State Bar (1984) 36 Cal34 785, and Giowanazziv: State ‘Bar (1980) 28 Cal 34 465, forthe proposition that misappropriation may be found merely by the fact thatthe balance ofan atorey"s cient tus account fls below the requisite amounts to be hel However for purposes of placing an aromey on involuntary inactive status befor a formal disciplinary proceeding hasbeen inated against the attomey, being able (o prove misappropriation alone is not enough. Indeed, the misappropriation cases relied upon by the State Ba forthe proposition that a drop in the CTA balance constitutes misappropriation, did not involve ‘ESPONDENT'S OPPOSITION TO APPLICATION FOR INVOLUNTARY INACTIVE ENROLLMENT