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Randall St. Mary (WSBA No. 4331, admitted 1971), of Everett, was disbarred, effective February 23, 2005, by order of the Washington State Supreme Court following a stipulation approved by the Disciplinary Board. This discipline was based on his conduct between 1994 and 2001 involving unauthorized use of the funds of an estate.
In 1993, Mr. St. Mary prepared a will for a client. The will authorized the creation of a testamentary trust for the benefit of the client’s children, devised all estate assets to the trust, and directed that Mr. St. Mary be the personal representative and trustee. The will directed Mr. St. Mary to hold the estate’s income and assets in the trust until the client’s youngest child reached the age of 25, and authorized disbursements to be made for the benefit of the children. The will further directed that if the client were to die before the youngest child graduated from college, then the personal representative was to establish a separate trust for the youngest child’s education.
The client died in October 1994, and the will was admitted to probate in November 1994. Mr. St. Mary was appointed personal representative. The client’s youngest child turned 25 in November 1999.
Mr. St. Mary did not establish a separate trust for the benefit of the youngest child’s education or to hold the assets of the estate. Mr. St. Mary did not invest liquid assets of the estate so as to maximize the value of the estate. Mr. St. Mary kept the estate’s assets in a checking and savings account over which he had sole control. Between 1995 and 1999, Mr. St. Mary disbursed more that $50,000 to the client’s youngest child, the majority of which was for her college education.
Between November 1994 and October 2001, Mr. St. Mary billed the estate $103,369.89 for legal fees and costs and paid himself $99,553.42 in legal fees without sending any billing statements to the beneficiaries or notifying them of the amounts paid or their basis. Mr. St. Mary sent the estate’s billing statement to himself and then authorized payment out of the estate’s account. Beginning in January 1998, Mr. St. Mary began to disburse to himself from the estate’s account more in fees and costs than he had billed. Between February 1998 and April 2000, in a series of transactions, Mr. St. Mary removed an additional $134,146.00 from the estate for his personal use, without disclosure to, or the consent of, the beneficiaries. Mr. St. Mary used the funds to purchase publicly traded stocks in his name and to pay his debts. Although Mr. St. Mary characterized these disbursals as “loans” memorialized by unsecured promissory notes, Mr. St. Mary did not contemporaneously provide the unsecured promissory notes to any of the beneficiaries.
Between April 2000 and August 2001, Mr. St. Mary replaced $87,819.37 of the previously disbursed $134,146.00 into the estate’s bank account. In October 2001, the Bar Association advised Mr. St. Mary that it had opened a disciplinary investigation into his handling of the estate, and disciplinary counsel took Mr. St. Mary’s deposition in the matter. Between October 2001 and August 2003, Mr. St. Mary deposited an additional $51,788.29 of his personal funds into the estate’s account.
Mr. St. Mary’s conduct violated RPC 1.5(a), requiring that a lawyer’s fee be reasonable; RPC 1.7(b), prohibiting a lawyer from representing a client if the representation may be materially limited by the lawyer’s own interests, unless the lawyer reasonably believes the representation will not be adversely affected and the client consents in writing after a full disclosure; RPC 1.8(a), prohibiting a lawyer from entering into a business transaction with a client or knowingly acquiring an ownership, possessory, security, or other pecuniary interest adverse to a client unless the transaction and its terms are fair and reasonable and fully disclosed and transmitted in writing to the client, the client is given opportunity to seek the advice of independent counsel, and the client consents; RPC 8.4(b), prohibiting commission of a criminal act (here, theft) that reflects adversely on the lawyer’s honesty, trustworthiness, or fitness as a lawyer in other respects; and RPC 8.4(c), which prohibits a lawyer from engaging in conduct involving dishonesty, deceit, fraud, or misrepresentation.
Leslie Ching Allen represented the Bar Association. Mr. St. Mary represented himself. Kimberly A. Boyce was the hearing officer. |