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MCLE Self-Assessment Test

Misappropriation, falsehoods and
delayed proceedings lead to disbarment

An Arcadia lawyer with a history of suing judges and opposing parties was disbarred last month, in part for misappropriating more than $345,000 from clients. RONALD NORTON GOTTSCHALK [#50625], 67, lost his license June 10. He also faces criminal embezzlement charges stemming from two cases that formed the basis for some of the State Bar accusations.

Gottschalk did not participate in the bar proceedings, and Judge Pat McElroy, whom he sued, recommended his disbarment as “the only adequate means of protecting the public from further wrongdoing.”

Among other things, Gottschalk made false assertions about judges and sought to have several disqualified, charged a client a $25,000 fee for work he did not do and then threatened her after she filed a complaint with the bar, and he deceived the elderly parents of another client into believing they faced incarceration for filing false accusations of child abuse unless they paid him $50,000 in advance fees. He also falsely told a judge that an opposing attorney faced bar discipline and a malpractice lawsuit, and he encouraged a client to misrepresent the amount of fees she paid a prior lawyer; when she refused, he claimed she lacked the mental capacity to act on her own behalf.

The bar charges involved four matters and McElroy found misconduct that included filing meritless claims, failures to maintain respect for the court, maintain client funds in trust, account for client funds, release files and notify clients of his receipt of funds, and he sought to mislead judges, made misrepresentations to the bar, charged an unconscionable fee and committed numerous acts of moral turpitude.

With two other lawyers, Gottschalk filed a class action suit and several personal injury claims in 2002 against International Medical Research (IMR), a company that produced an herbal supplement intended to treat prostate cancer. The supplement was recalled and the company owners pleaded no contest to misdemeanor charges of selling dangerous products to the public.

The other two lawyers ended their association with Gottschalk when they differed over litigation strategies and Gottschalk sought appointment as the lead counsel in the class action. Los Angeles Superior Court Judge Anthony Mohr judge denied his motion, so Gottschalk added him to the list of defendants in the personal injury cases “in order to delay the proceedings and to require that Judge Mohr recuse himself,” McElroy wrote.

Gottschalk made a variety of false allegations against Mohr and another judge; Mohr recused himself and, consistent with the Los Angeles courts’ policy, the entire bench was recused from hearing the class action and the personal injury cases. The cases were moved to San Diego, where Gottschalk made similar allegations against judges there.

Two defendants in the case settled and agreed to pay nine plaintiffs $400,000. The clients in turn advanced $240,000 to Gottschalk as a “war chest” for costs to pursue the remaining defendants. Through a series of transfers between his two client trust accounts and the purchase of four cashier’s checks, Gottschalk misappropriated the $240,000. Along the way, several clients, worried about what they perceived as Gottschalk’s “growing mental instability,” formed a plaintiffs cooperative association and directed the lawyer not to disburse any funds without their approval. He did not respond to their requests to account for their money and the San Diego court relieved him as counsel. The clients sued Gottschalk to obtain an accounting for the funds.

Gottschalk also represented woman who suspected corruption in connection with her divorce case. According to McElroy’s decision, Gottschalk told the woman he had FBI contacts and would have them investigate her concerns. The client sent several letters to Gottschalk outlining her concerns and paid him $10,000 as an advance fee and $5,000 for costs. Two weeks later, he said he needed another $50,000, backdated the original fee agreement and threatened the client’s parents with incarceration “due to what he claimed was their potential criminal liability for filing false allegations of child abuse” against the client’s ex-husband.

He also advised the client to falsely claim that she had paid $45,000 to her previous attorney. The client refused.

Gottschalk “feigned ignorance” about the information the client provided to him in her letters and he made a series of false allegations about the opposing counsel both in open court and in pleadings, McElroy said. He told the judge the other lawyer faced disbarment as a result of his complaints and that the client sued her for malpractice. Neither claim was true. Even after the client fired him, Gottschalk insisted that he still represented her and refused to give her file to a new lawyer.

In another matter, he represented a woman who filed a petition to probate her aunt’s estate, primarily because the aunt won a judgment against a nursing home for $260,000. Gottschalk received a check for more than $112,000, payable to the niece, that he deposited, later withdrawing $100,000. He did so, McElroy said, to prevent the California Department of Health and Human Services (DHHS) from attaching the funds to pay a $166,815 lien for the aunt’s medical bills.

Gottschalk later received another check for $5,102 that he cashed without telling his client. He misappropriated $105,102, McElroy said. He told the court the aunt’s estate had no assets.

Gottschalk also interfered with the sale of property held by the aunt’s former husband (from whom she was divorced for more than 30 years), after he persuaded the client to try to attach some real estate holdings. He tried to have the judge recused in that matter as well, and, according to McElroy, “alleged that ‘organized crime’ had penetrated the probate court and referred to the estate as ‘the Sopranos.’ (Gottschalk) further falsely asserted he was being assisted by former law enforcement officials experienced in organized crime syndicates in Southern California,” and asked that the entire Los Angeles bench be recused. The case was transferred to Van Nuys.

In the final matter, Gottschalk did legal work for a woman in exchange for her clerical services. In a demand letter he sent on her behalf, he claimed the woman owed him $25,000 in legal fees. When she fired him, he asserted a lien against her. McElroy found that Gottschalk was fully compensated ― with $400 ― for the work he did. The client negotiated her own settlement of $349,314.