In the Matter of Stein, 17,349.

• Decision Date: 20 February 2008
• Docket Number: No. 17,349.,17,349.
• Parties: In the MATTER of Stuart L. STEIN, Esquire. An Attorney Licensed to Practice Before the Courts of the State of New Mexico, No. 02-2006-505.
• Court: New Mexico Supreme Court

177 P.3d 513

2008 NMSC 013

In the MATTER of Stuart L. STEIN, Esquire.

An Attorney Licensed to Practice Before the Courts of the State of New Mexico, No. 02-2006-505.

No. 17,349.

Supreme Court of New Mexico.

February 20, 2008.

Joel L. Widman, Disciplinary Counsel, Albuquerque, NM, for Petitioner.

The Stuart Law Firm, Stuart L. Stein, Albuquerque, NM, for Respondent.

OPINION

PER CURIAM.

{1} This matter came before the Court to consider whether attorney Stuart L. Stein (Respondent) should be disbarred for violating the Rules of Professional Conduct through his actions associated with his representation of Bruce Clinesmith and his wife, Ruth Clinesmith. For the reasons that follow, we adopt the findings and conclusions of the hearing committee and adopt the recommendation of the disciplinary board to disbar Respondent from the practice of law.

I. BACKGROUND

{2} These disciplinary proceedings commenced with a letter sent by the Honorable Linda M. Vanzi of the Second Judicial District Court, setting forth a complaint regarding Respondent's conduct in a proceeding seeking the appointment of a guardian and conservator for Bruce Clinesmith. The petition for appointment of a guardian and conservator was filed by Bruce's daughter, Cathe Temmerman, because of concerns about her father's emotional and financial well-being.

{3} Respondent appeared on behalf of Bruce and Ruth, and other members of Ruth's family who purported to have an interest in the matter. Respondent filed an answer to the petition requesting that Ruth be appointed as guardian for Bruce, if in fact the court determined a guardian should be appointed. The answer further alleged the existence of a durable power of attorney executed by Bruce in favor of his wife and stated that the court should not disregard Bruce's clear intent, presumably as evidenced by the power of attorney. Upon the filing of the petition, the court appointed Richard Reidy as guardian ad litem for Bruce.

{4} At the time of the filing of the petition in the guardianship case, there were two trusts in existence that were created by Bruce. One was a 1997 revocable trust (the 1997 trust), which provided for the income and principal to be paid to Bruce as needed, with the remainder payable upon his death to the Moody Bible Institute of Chicago (Moody Bible). The corpus of this trust was $6,275,000.00. The second was a 1999 revocable trust (the 1999 trust), the income and principal of which were to be paid to Bruce. Upon his death, the remainder was to be held in trust for his wife. Upon Ruth's death, the remainder was to be paid to Moody Bible. The corpus of this trust was $4,800,000.00.

{5} On the same date that Respondent filed his answer to the guardianship and conservatorship petition, Respondent wrote to the trustee, demanding that the income and corpus of the 1997 Trust and the 1999 Trust be paid to Ruth, individually. When the trustee refused the request, Respondent filed two lawsuits in the United States District Court for the District of New Mexico, which the hearing committee found would affect the manner in which Bruce's estate would be managed, expended, and distributed. Respondent took these actions notwithstanding his knowledge of the pendency of the guardianship and conservatorship proceeding and without notice to Bruce's guardian ad litem.

{6} Respondent, as Bruce's and Ruth's attorney, filed the first federal lawsuit to void the trusts created by Bruce in favor of Moody Bible, and to have the funds declared community property. The Moody Bible law_suit was filed on Ruth's behalf, individually, and purportedly on Bruce's behalf, "by Ruth M. Clinesmith, his attorney-in-fact," pursuant to the durable power of attorney.

{7} Respondent filed the second federal lawsuit against Citigroup Global Markets, Inc., on behalf of Ruth in her individual capacity, alleging the existence of a joint account in the names of Bruce and Ruth that was restricted by Citigroup without authority. Citigroup had placed a freeze on the account because of its concerns that Bruce's mental health had deteriorated and because of its uncertainty that he fully comprehended his actions. In the Citigroup lawsuit, Ruth sought damages, or in the alternative, full access to the account. However, once again, Respondent did not notify Bruce's guardian ad litem of the filing of this lawsuit.

{8} Significantly, neither lawsuit named Bruce as a plaintiff individually. Also, the two complaints filed by Respondent acknowledge Bruce's potential incapacity. The complaint prepared and filed by Respondent in the Moody Bible lawsuit alleges that in August 2004, when Bruce and Ruth relocated to Albuquerque, Bruce was suffering from "early signs of dementia, be it Alzheimer's Disease or some other dementia diagnosis." In the Citigroup complaint, Respondent states "[t]hat there is a current question about the competence of Bruce C. Clinesmith."

{9} Although the Citigroup complaint requested Ruth's full access to the account as co-tenant with Bruce, Respondent negotiated a settlement which transferred the account to another broker, exclusively under Ruth's name, thus effectively precluding Bruce from accessing the account. During the negotiations Respondent produced a copy of the power of attorney executed by Bruce in his wife's favor. The settlement was confirmed in letters sent by Respondent to Citigroup's associate general counsel. This conduct by Respondent resulted in the removal of assets in excess of $250,000.00 from the state district court's jurisdiction in the guardianship and conservatorship proceeding without notice to, or leave of, that court.

{10} During a subsequent hearing Judge Vanzi considered a motion to disqualify Respondent from representing Bruce because of a conflict between his interests and those of Ruth. Of note, during the hearing, was Respondent's statement that "I agree that [Bruce] is incapacitated to the extent that he may need a guardian or conservator." Thereafter, the court disqualified Respondent from representing Bruce, revoked the power of attorney previously granted to Ruth by Bruce, and appointed Decades LLC temporary guardian and conservator of Bruce. The court set forth the following rationale for disqualifying Respondent from representing Bruce.

The interests of Bruce C. Clinesmith and Ruth M. Clinesmith are adverse to each other in this proceeding and in the federal proceedings currently pending. Representing both individuals in these proceedings constitutes an impermissible conflict of interest and neither Stuart L. Stein, Esq. or The Stein Law Firm can continue to represent the interests of Bruce C. Clinesmith.

The court also ordered the court clerk to "issue letters of full temporary guardianship and temporary conservatorship to Decades LLC upon accepting its duties hereunder" and "in connection with its duties as temporary guardian and temporary conservator, Decades LLC shall consult with the Guardian Ad Litem and promptly retain counsel to represent Mr. Clinesmith's interests in the federal proceedings ...." Pursuant to this order, the attorney for Decades LLC sent a letter to Respondent advising him that Decades LLC, in its capacity as Bruce's temporary guardian and conservator, considered Respondent's representation of Bruce to be terminated effective July 18, 2005, and stated that the termination applied to all matters, including the guardianship and conservatorship case, the Moody Bible lawsuit, and the Citigroup lawsuit.

{11} Respondent never advised the federal court in which the Moody Bible lawsuit was pending that he had been disqualified from representing Bruce, that the power of attorney had been revoked, or that a temporary guardian and conservator had been appointed for Bruce. Respondent continued to represent Bruce in the Moody Bible, lawsuit after he was disqualified from doing so, by remaining attorney of record and filing a motion to vacate a scheduling order. In addition, at no time did Respondent advise Citigroup, to whom he negotiated a transfer of funds from Bruce to Ruth, that the power of attorney he previously produced had been revoked.

{12} After being ordered to discontinue his representation of Bruce, Respondent went to the dementia unit of the Woodmark, a residential care facility in which Bruce was a patient, and had Bruce removed from the dementia unit and taken to a private room to execute a new will and trust which Respondent had prepared for Bruce's signature. The new will and trust sought to revoke the Moody Bible trusts and create a new trust with Ruth as trustee with all the power "that an absolute owner of such property would have." These documents had the additional effect of removing all of the assets belonging to Bruce from the jurisdiction of the court in the guardianship and conservatorship proceeding. Respondent did not notify the court, the guardian ad litem, or the temporary guardian and conservator of his intended visit with Bruce, or of his efforts to have Bruce sign a new will and trust.

{13} Upon learning of the meeting and execution of the will and trust, Decades LLC filed a motion asking for an emergency hearing and seeking an order prohibiting Respondent from interfering with its duties as temporary guardian and conservator and preventing Respondent from having any contact with Bruce. The court held a hearing on the motion and Respondent admitted going to the Woodmark without notifying Decades LLC. Remarkably, he told the court that he "didn't have to" because it was not explicitly stated in the order. Respondent also admitted that he did not notify the guardian ad litem. When asked if it was his practice to approach incapacitated persons without notifying the court-appointed guardian/conservator or any other person caring for the individual, Respondent stated, "[i]n this case this is what I did and I feel that it is fine. It is ethical, and not in contravention of your order ..." Thereafter, the court...