The State Bar of California has filed disciplinary charges against a Los Angeles-area trial attorney for allegedly mishandling millions of dollars in settlement funds for a client who was burned over 90% of his body following a 2010 gas-line explosion.
State Bar prosecutors filed the eight-count Notice of Disciplinary Charges (NDC) against attorney Robert William Finnerty on March 21. Finnerty, who previously worked on behalf of the now-defunct Girardi Keese law firm, could face suspension, disbarment or monetary sanctions amounting to $5,000 per violation for his involvement in the case of Joseph Ruigomez, who spent two months in a coma after an underground gas line near his home exploded, killing eight people and destroying 38 homes.
Last year, Thomas Girardi, the co-founder of Girardi Keese, was found guilty of four counts of wire fraud as a result of taking part in an embezzlement scheme involving tens of millions of dollars from his legal clients’ funds.
In the Ruigomez case, the State Bar accused Finnerty of failure to communicate the details of a $53 million settlement agreed to by Pacific Gas & Electric Co. to his clients, moral turpitude, concealment of the settlement amount, breach of fiduciary duty and conflict of interest, among other allegations.
“(The) respondent (Finnerty) and Girardi settled the Ruigomezes’ personal injury case against PG&E for $53 million before the Ruigomezes arrived at the mediation and without their prior approval,” the State Bar said in its NDC. “Neither respondent nor Girardi explained to the Ruigomezes, and they did not understand, that respondent and Girardi were required to obtain the Ruigomezes’ approval before they could agree to settle the Ruigomezes’ claims against PG&E on the Ruigomezes’ behalf.”
Such actions are a violation of the state’s Rules of Professional Conduct, according to the State Bar.
The Ruigomez family members were entitled to receive at least $11.6 million of a $28 million payment wired to the Girardi Keese firm in January of 2013, the State Bar alleged, adding that the firm had misappropriated at least $6.6 million of those settlement funds.
Finnerty and Girardi misled the family members by causing them to believe that the funds were being invested in an account that would earn 6.5% in interest annually, according to the State Bar, but no such investment of the funds occurred. In fact, the Girardi firm was not licensed as a financial advisor, the NDC states.
“... Even though respondent knew, or was grossly negligent in not knowing, that the Girardi firm had misappropriated the Ruigomezes’ settlement funds, he never informed the Ruigomezes that the Girardi firm had misappropriated their settlement funds,” State Bar prosecutors said. “Instead, between on or about Jan. 24, 2013, and in or about May 2019, respondent led the Ruigomezes to believe that the Girardi firm was handling their settlement funds properly.”
The Girardi firm ignored emails sent by Joseph Ruigomez and other family members seeking an accounting of the settlement funds. During this time, family members received some “interest” funds but only on an intermittent basis, according to the State Bar.
Finnerty, who was admitted to practice law in the state in 1985, was known to specialize in the areas of law including catastrophic personal injuries, insurance bad faith, product liability and professional negligence. The time allowed for the attorney to respond to the State Bar’s allegations has been extended to April 30.
Neither Finnerty nor his attorney responded to requests for a comment about the State Bar’s action.