NEWPORT BEACH ATTORNEY FACES DISBARMENT FOR MISAPPROPRIATING $95,000

Media Contact:  Laura Ernde                               415-538-2283                        laura.ernde@calbar.ca.gov

San Francisco (May 17, 2012) – The State Bar of California has accepted a stipulated disbarment from Newport Beach attorney Kendall R. Paulson, who misappropriated $95,000 that was supposed to be used to settle his client’s lawsuit.

According to the disbarment stipulation approved by the State Bar Court Wednesday, Paulson, 51, represented Carl Lovegren in a civil suit filed against him in Orange County Superior Court in September 2006. The following year, the parties entered into a settlement agreement whereby Lovegren agreed to pay the plaintiffs $95,000. The agreement stated that should Lovegren fail to pay an agreed-upon amount by Feb. 9, 2008, he would be responsible for twice the balance, plus interest.

On Dec. 10, 2008, Lovegren gave Paulson $40,000 to pay part of the settlement agreement, money that Paulson deposited into his client trust account but later spent.  Paulson misappropriated an additional $55,000 in settlement money from another check Lovegren gave him in June 2009.

According to the stipulation, Paulson misled both Lovegren, who thought he had been paying off the settlement, and the court, by telling a judge that his client was trying to raise money to pay the judgment but needed more time.

Paulson (bar number 120688), who had no prior history of discipline, will be placed on involuntary inactive status May 18 until the California Supreme Court acts on the disbarment recommendation. He has agreed to pay restitution, plus interest. 

The case was prosecuted by Deputy Trial Counsel Jessica A. Lienau.

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The State Bar of California is an administrative arm of the California Supreme Court, serving the public and seeking to improve the justice system for more than 80 years. All lawyers practicing law in California must be members of the State Bar. By May 2012, membership reached 237,000.