Thursday, August 29, 2019
A published recommendation of the California State Bar Court Review Department
Rita Mae Lingwood borrowed funds from a trust while serving as its trustee pursuant to a clause in the trust that permitted such transactions. The Office of Chief Trial Counsel of the State Bar (OCTC) alleged that the $60,000 loan was an improper business transaction with a client and also a misappropriation of trust funds. OCTC also charged Lingwood with failing to comply with the Probate Code and making misrepresentations regarding the transaction.
The hearing judge found that Lingwood both misappropriated the $60,000 and improperly entered into a loan transaction for the same $60,000. The judge also found that Lingwood made misrepresentations about the loan, but dismissed the charge that she failed to comply with the Probate Code as duplicative of the improper loan charge. The judge recommended that Lingwood be disbarred.
Lingwood appeals, asserting that the evidence does not support misappropriation and misrepresentation. In her pretrial statement, Lingwood acknowledged that the manner in which she borrowed the funds violated rule 3-300 of the Rules of Professional Conduct (count three: business transaction with a client) and that she failed to comply with Probate Code section 16002 (count two: failure to comply with laws)—two of the four counts of charged misconduct. She also challenges the aggravation and mitigation findings. Lingwood argues that disbarment is not appropriate discipline here. OCTC does not appeal and supports the disbarment recommendation.
Upon our independent review of the record (Cal. Rules of Court, rule 9.12), we find that Lingwood had the authority to borrow the funds under the terms of the trust agreement, but she is culpable of two charged counts of misconduct: violating rule 3-300 (count three) in the manner in which she borrowed the funds and violating her fiduciary duties under the Probate Code (count two). We do not find that she misappropriated funds from the trust, in violation of Business and Professions Code section 6106, nor do we find that she is culpable of making any misrepresentations. We recommend an actual suspension of 60 days to protect the public, the courts, and the legal profession.
( Mike Frisch)