SAN FRANCISCO – Thomas Richard D’Arco, who practices in Canoga Park, admitted to wrongdoing in two client cases and was placed on two years’ probation, facing a one-year suspension if he does not comply with the terms of his disciplinary probation. He was also ordered to take the multistate professional responsibility examination by the State Bar.
D’Arco’s discipline stems from two client cases. The official Oct. 6, 2015, court document explained that Caridad Perez employed D’Arco to provide home mortgage loan modification services and other mortgage loan forbearance involving a California property.
Between Aug. 26, 2010, and Oct. 27, 2010, Perez paid D’Arco a total of $2,500 in attorney’s fees, the document states. Also, prior to charging and collecting any of the advanced attorney’s fees from Perez, D’Arco allegedly had not fully performed each and every service that he had been contracted to perform.
Prior to entering into a fee agreement with Perez, D’Arco also failed to provide the following separate written statement, in not less than 14-point bold type, as required by Civil Code:
“It is not necessary to pay a third party to arrange for a loan modification or other form of forbearance from your mortgage lender or servicer. You may call your lender directly to ask for a change in your loan terms. Nonprofit housing counseling agencies also offer these and other forms of borrower assistance free of charge. A list of nonprofit housing counseling agencies approved by the United States Department of Housing and Urban Development (HUD) is available from your local HUD office or by visiting www.hud.gov.”
The State Bar explained the D’Arco willfully violated professional codes of conduct by accepting fees without completing all tasks agreed upon and by failing to provide a separate written statement.
There were similar issues brought up with the second client case involving Howard and Michelle Riscen, who employed D’Arco to provide home mortgage loan modification services and other mortgage loan forbearance services with regards to their property located in California.
“On March 31, 2014, the Riscens paid $5,850 in attorney’s fees,” the court document said. “Prior to charging and collecting any of the advanced attorney’s fees from the Riscens, (D’Arco) did not fully perform each and every service he had been contracted to perform. He also did not provide the written statement to inform his clients of their other options outside of hiring an attorney.”
The court document explained that D’Arco also failed to properly supervise his employees, which resulted in his employees informing the Riscens that his office had submitted a home mortgage loan modification request and a settlement proposal of a home equity line of credit to the Riscens’ lenders when D’Arco’s office had not.
“Thereafter, on Nov. 20, 2014, (D’Arco’s) employees submitted a loan modification request and a settlement proposal to the lenders on behalf of the Riscens, even though the Riscens had previously instructed (his) employees not to submit a loan modification request or settlement proposal on their behalf.”
The court document said the employees’ actions were done without D’Arco’s knowledge and consent.
“By failing to properly supervise his employees, which resulted in improper information being conveyed and work being done contrary to his clients’ instructions, (D’Arco) intentionally, recklessly, or repeatedly failed to perform legal services with competence, in willful violation of Rules of Professional Conduct, rule 3-110(A),” the document said.
Because there was no prior discipline with D’Arco after 37 years in practice and he agreed to refund illegal fees to his clients, the court found a lighter sentence to be acceptable.
“The seriousness of (D’Arco’s) misconduct is lessened by refunding the illegal fees to his clients prior to entering into this stipulation,” the document said. “Since (D’Arco) refunded the illegal fees, there was little or no harm to the clients, the public, the legal system, or to the profession.”
By refunding fees and entering into the stipulation with the State Bar, the court agreed that he demonstrated his willingness to conform to ethical responsibilities in the future. Thus, D’Arco was still allowed to practice law as long as he followed the court’s stipulations.