Vista attorney faces suspension following fee dispute with client

By Karen Kidd | Aug 29, 2017

Vista attorney Catherine Irene Denevi faces suspension after withdrawing funds from her client trust account during a fee dispute with her client, according to a recent California State Bar filing.

Denevi was charged with two counts of misconduct in a single client matter, according to the 14-page decision issued July 19 by the state bar. Allegations against Denevi included withdrawing disputed client funds from her client trust account and the misappropriation of those funds, according to the decision.

"This court finds, by clear and convincing evidence, that [Denevi] is culpable of both counts," the decision said. "In view of the [special] facts and circumstances surrounding the misconduct, as well as the evidence in mitigation and lack of aggravation, the court recommends, among other things, that [Denevi] be suspended from the practice of law for 90 days."

The state bar's decision is pending final action by the California Supreme Court, an appeal before the state bar's review department or expiration of time in which parties to may request further review within the state bar court.

Denevi was admitted to the bar in California on Dec. 4, 2002, according to her profile at the state bar website.

Allegations against Denevi stemmed from dealings with a client whom she represented starting in 2004 in civil and criminal matters that were part of a complicated divorce and who, by 2013, owed her about $25,000 in past due fees, according to the decision.  

Denevi's client misconstrued a sanction order to mean no additional attorney fees were owed to Denevi, which sparked a fee dispute between the two, according to the decision. Denevi sought advice from the state bar's ethics hotline, which recommended she retain the disputed amount in her client trust account and then seek judicial determination of the fee dispute, according to the decision.

During settlement negotiations and subsequent litigation with the client, complicated by "substantial emotional and financial difficulties", the client trust account balance dropped below the amount Denevi had been advised to maintain, according to the decision. By June 2015, Denevi re-deposited the disputed funds into the account, according to the decision. The dispute was resolved this past March.

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