On The Beach (House)
The California State Bar Court Review Department recommends disbarment of an attorney for misconduct relating to her parents’ estate.
This disciplinary proceeding arises from Jane L. Schooler’s actions as trustee and executor of her parents’ multi-million dollar estate and trusts. The Office of the Chief Trial Counsel of the State Bar (OCTC) charged her with violating her fiduciary duties, making misrepresentations to the probate court, refusing to follow court orders and pay sanctions, and maintaining an unjust action by filing frivolous appeals. The hearing judge found Schooler culpable and recommended discipline including a two-year actual suspension continuing until she demonstrates her rehabilitation…we recommend disbarment given Schooler’s egregious misconduct and the substantial harm she caused the beneficiaries, as detailed in the Factual Background. We do not recommend Schooler be ordered to pay sanctions in light of our disbarment recommendation and because the state courts have already ordered such payments.
This argument did not work
Schooler claims that her misconduct should be excused because she was acting as a trustee for the family estate, not as an attorney, and because she relied on advice of counsel for her actions. First, relying on such advice from other counsel is not a defense in a discipline case. (Sheffield v. State Bar (1943) 22 Cal.2d 627, 632.) Second, Schooler disregarded her attorney’s advice—he advised her by letter that the Beach House was not subject to the original trust provision designating it a special asset, and he told her she was free to distribute the assets after the Internal Revenue Service issued tax rulings in 2006. Moreover, it was after counsel represented Schooler that she executed the grant deed transferring the Beach House to her sister and herself, and falsely represented that she was still a trustee. The law is clear that even if Schooler was not practicing law, she was required to conform to the ethical standards required of attorneys.
Suspension was not sufficient
Schooler had a fiduciary duty under the terms of the trusts to equitably distribute the Rowena Estate to the named beneficiaries. Unfortunately for them, she failed in performing these duties for seven years after her mother’s death. In particular, she distributed almost none of the assets of the sizeable estate, and continued living in a major asset, the Beach House, after evicting her brother and rent-paying tenants. During the same time, she allowed the mortgage on the Beach House to go into default, failed to pay taxes on the Nevada properties, refused to accept offers to buy certain properties, and did not collect or pay any rent on the Beach House while she lived there. Her conduct contributed to a substantial loss in the value of the trust corpuses, which financially harmed her siblings who still have not received their full distribution of the estate. Moreover, after Schooler was removed as trustee, she filed a series of frivolous appeals and made misrepresentations to courts and others to try to retain control of the assets. In sum, we find that Schooler’s blatant disregard for her ethical duties and for the court’s processes calls for discipline at the highest end of the range provided in standard 2.11— disbarment. This record well demonstrates that she is at risk for committing future misconduct given her varied wrongdoing and the aggravating factors, including her indifference. We conclude that our recommendation is supported by case law, and that the public, the courts, and the profession are best protected if Schooler is disbarred under standard 2.11.
(Mike Frisch)