                   THE STATE OF SOUTH CAROLINA
                        In The Supreme Court

            In the Matter of Farzad Naderi, Respondent.

            Appellate Case No. 2019-000061


                              Opinion No. 27881
                 Submitted March 27, 2019 – Filed April 24, 2019


                                   DEBARRED


            John S. Nichols, Disciplinary Counsel, and Sabrina C.
            Todd, Senior Assistant Disciplinary Counsel, of
            Columbia, for the Office of Disciplinary Counsel.

            Farzad Naderi, of California, pro se.



PER CURIAM: Respondent, a licensed California attorney, provided legal
services in South Carolina to a South Carolina resident without having been
admitted or authorized to practice law in this state, in violation of the Rules of
Professional Conduct. Following an evidentiary hearing at which respondent did
not appear, the Hearing Panel of the Commission on Lawyer Conduct (the Panel)
recommended debarring respondent and ordering respondent pay the cost of the
proceedings and restitution to his South Carolina client. As neither party sought
review of the Panel's report, the matter is now submitted for the Court's
consideration. We impose the sanctions recommended by the Panel.

                                      FACTS

Despite never having been admitted to practice law in South Carolina or applying
for pro hac vice admission, respondent provided legal services in the state
operating as the Pacific National Law Center (PNLC).
      The J.H. Matter

In December 2013, J.H., a South Carolina resident, homeowner, and veteran, hired
respondent to assist him in negotiating a modification of his home loan.
Individuals at PNLC assured J.H. the firm could get his loan modified and decrease
his mortgage payments by securing both a balance reduction and a lower, fixed
interest rate. PNLC employees also promised J.H. the firm would work diligently
and return his calls within 48 hours.

J.H. signed several forms provided to him by PNLC staff, including an "Attorney
Client Retainer Agreement" and a "Third Party Authorization and Release Form."
The release form permitted J.H.'s lender to discuss his home loan with PNLC.
Respondent was specifically named as the individual permitted to discuss the loan
on behalf of J.H. The form listed respondent's title as "Paralegal."

The retainer agreement provided that, in exchange for a fee of $2,995, PNLC
would provide "legal services," including "representation . . . for negotiation and
resolution of disputes with current lender(s) regarding the subject real property and
mortgage loan(s)." Pursuant to the retainer agreement, litigation and litigation
services were excluded from the scope of the representation.

The retainer agreement also provided that the fees paid by J.H. were not
conditioned on the outcome of his case, and restricted J.H.'s ability to cancel the
agreement and seek a refund outside of the first five days after he signed the
agreement. After the five-day refund window, the agreement required disputes
over fees to be arbitrated pursuant to the guidelines and standards adopted by the
State Bar of California. Other disputes would be resolved though binding
arbitration in accordance with the arbitration rules of the bar association of Orange
County, California. Finally, the retainer agreement also indicated PNLC had no
obligation to retain J.H.'s file for any period of time following the end of
representation.

In January, February, and March of 2014, J.H. made payments pursuant to the
retainer agreement totaling $2,995, via counter deposits into PNLC's bank account.
J.H. provided PNLC with all information and documentation they requested, and
PNLC told J.H. not to worry, the law firm would secure the loan modification, and
his lender would not take his home. However, shortly after making his last
payment, J.H. began experiencing difficulties reaching anyone at PNLC. PNLC
never obtained a loan modification or offered J.H. any other solutions.
When J.H. received notice of the foreclosure hearing, he was again unable to reach
anyone at PNLC. J.H. appeared by himself at the foreclosure hearing, and
eventually had to hire another attorney and file for bankruptcy in order to save his
home. At the evidentiary hearing before the Panel, J.H. testified that keeping up
with his home loan payments had been a struggle, but his home had not been
foreclosed. J.H. further testified he was unaware of any contact PNLC made with
his lender, and he believed he had been scammed and the wrongdoer should be in
jail or disbarred.

      Related Claims against Respondent in Other Jurisdictions

In February 2016, the State Bar Court of California accepted a stipulation signed
by respondent for a ninety-day suspension and two years' probation for engaging in
the unauthorized practice of law in Florida and Washington. In re Naderi, Nos.
14-O-04421 & 14-O-06302 (Los Angeles, Cal., State Bar Ct. of Cal. Hearing
Dep't, Feb. 10, 2016). As part of the stipulation, respondent agreed that he, acting
as PNLC, was hired and paid to complete loan modifications for a resident of
Florida and a resident of Washington. Id. Respondent conceded he accepted
illegal fees in both cases. Id. The Florida client did not receive a loan
modification. Id.

The Division of Consumer Services for the State of Washington also brought an
administrative action against respondent, doing business as PNLC. Respondent
did not cooperate or participate in the matter despite having been served by mail to
his post office box. Respondent was ordered to cease and desist from offering loan
modification services to Washington consumers, ordered to pay restitution to a
Washington resident, fined, and ordered to pay costs. In re Naderi, No. C-14-
1593-16-FO01 (Olympia, Wash., Dep't of Fin. Insts., Div. of Consumer Servs.,
May 26, 2016).



                                   ANALYSIS

Respondent failed to cooperate with the Office of Disciplinary Counsel's (ODC)
investigation, did not answer ODC's formal charges, and was found to be in
default. Therefore, respondent is deemed to have admitted the factual allegations
made against him in the charges. See Rule 24(a), RLDE, Rule 413, SCACR
("Failure to answer the formal charges shall constitute an admission of the
allegations.").

Further, although not licensed in South Carolina, respondent is subject to discipline
by this Court. By providing legal services in South Carolina, respondent meets the
definition of "lawyer" provided in Rule 2(r), RLDE, Rule 413, SCACR, which
includes "a lawyer not admitted in this jurisdiction if the lawyer provides or offers
to provide any legal services in this jurisdiction; or anyone whose advertisements
or solicitations are subject to regulation by Rule 418, SCACR." As such, pursuant
to Rule 8.5(a), RPC, Rule 407, SCACR,1 respondent is subject to the disciplinary
authority of this Court and the Commission on Lawyer Conduct, and to the
provisions of the Rules of Professional Conduct to the same extent as a lawyer
admitted to practice law in this state.

Respondent's actions and inactions described above constitute a number of
violations of South Carolina law and the Rules of Professional Conduct. First, by
agreeing to represent J.H. in the negotiation of a modification of his home loan,
respondent provided legal services on a temporary basis in South Carolina as
contemplated by Rule 5.5(c), RPC, Rule 407, SCACR. However, respondent
failed to meet any of the requirements outlined in Rule 5.5(c) that would have
allowed him to engage in the temporary practice of law in this state. Respondent's
representation of J.H. was: (1) not undertaken in association with an attorney
admitted to practice in South Carolina; (2) not reasonably related to a matter in
which respondent was reasonably expected to be authorized to appear because the
terms of respondent's fee agreement specifically excluded litigation; (3) not
reasonably related to a pending or potential arbitration, mediation, or other
alternative dispute resolution proceeding in South Carolina or California; and (4)
did not arise out of or relate to respondent's representation of a client in California
because J.H. was a South Carolina resident with a South Carolina legal issue.

Accordingly, respondent violated section 40-5-310 (practicing law or soliciting
legal cause of another without being enrolled as a member of the South Carolina
Bar), and section 40-5-370 (soliciting legal business unlawfully) of the South
Carolina Code (2011). Additionally, respondent's conduct violated Rules 5.5(a)
(unauthorized practice of law) and 8.4(b) (committing a criminal act that reflects

1
 "A lawyer not admitted in this jurisdiction is also subject to the disciplinary
authority of this jurisdiction if the lawyer provides or offers to provide any legal
services in this jurisdiction." Rule 8.5(a), RPC, Rule 407, SCACR.
adversely on an attorney's honesty, trustworthiness, or fitness), RPC, Rule 407,
SCACR.

Second, respondent acted as a credit counseling organization and provided
consumer credit counseling services to J.H. as defined in section 37-7-101 of the
South Carolina Code.2 Respondent's providing of these counseling services
without a license and without filing a surety bond as required by statute,3 and
respondent's collecting of a fee from J.H. prior to earning that fee,4 constituted a
violation of Rule 8.4(e), RPC, Rule 407, SCACR (engaging in conduct prejudicial
to the administration of justice).

Third, by limiting J.H.'s ability to rescind the retainer agreement and by failing to
provide a clear and reasonable avenue for J.H. to seek a refund if respondent failed
to perform the work, respondent violated Rule 1.5(a), RPC, Rule 407, SCACR
(unreasonable fees). By stating in the retainer agreement that PNLC had no
obligation to retain J.H's file, respondent violated Rule 1.15(i), RPC, Rule 407,
SCACR (safekeeping of client property). Requiring J.H. resolve any disputes that
arose out of the retainer agreement in accordance with procedures established in
respondent's jurisdiction, not South Carolina, violated Rule 8.4(e), RPC, Rule 407,
SCACR (engaging in conduct that is prejudicial to the administration of justice).

Fourth, respondent failed to provide competent and diligent representation to J.H.

2
 Section 37-7-101 defines a "credit counseling organization" as "a person
providing or offering to provide to consumers credit counseling services for a fee,
compensation, or gain, in the expectation of a fee, compensation or gain." S.C.
Code Ann. § 37-7-101(2) (2015). The same statute defines "credit counsel
services" as "negotiating or offering to negotiate to defer or reduce a consumer's
obligation with respect to credit extended by others." S.C. Code Ann. § 37-7-
101(3)(c) (2015).
3
 See S.C. Code Ann. §§ 37-7-102 and -103 (2015) (requiring a person engaged in
credit counseling services in South Carolina to obtain a license from and file a
surety bond with the South Carolina Department of Consumer Affairs).
4
 See S.C. Code Ann. § 37-7-116(A)(11) (2015) (stating a licensee providing credit
counseling services may not "collect a payment from a consumer before the
payment being earned as specifically defined in the contract between the licensee
and the consumer").
and failed to maintain reasonable communication with J.H. in violation of Rules
1.1 (competence), 1.3 (diligence), and 1.4 (communications), RPC, Rule 407,
SCACR.

Finally, respondent's failure to cooperate in any fashion with ODC's investigation
and prosecution of these matters violated Rule 8.1(b), RPC, Rule 407, SCACR
(knowingly failing to respond to a lawful demand for information from a
disciplinary authority).

Accordingly, respondent is hereby debarred from the practice of law in this state.
Respondent is prohibited from practicing law or seeking any form of admission to
the practice law in South Carolina, including pro hac vice admission, without first
obtaining an order from this Court. See Rule 2(g), RLDE, Rule 413, SCACR
(describing the sanction of "debarment"). Further, respondent shall, within thirty
(30) days of the filing of this opinion, pay $1,112.13 for the costs of the
proceedings to the Commission on Lawyer Conduct and restitution in the amount
of $2,995 to J.H. If respondent is unable to pay these amounts in full within thirty
(30) days of the filing of this opinion, within the same timeframe, he must enter
into a reasonable payment plan with the Commission on Lawyer Conduct.

DEBARRED.

BEATTY, C.J., KITTREDGE, HEARN, FEW and JAMES, JJ., concur.
