In re Stuart ( 2023 )

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DISTRICT OF COLUMBIA COURT OF APPEALS
No. 21-BG-0656
IN RE PAMELA BRUCE STUART.
A Suspended Member of the Bar
of the District of Columbia Court of Appeals
(Bar Registration No. 220236)
On Report and Recommendation
of the Board on Professional Responsibility
(19-BD-007; DDN 2019-D016)
(Argued October 5, 2022 Decided March 2, 2023)
Pamela Bruce Stuart, pro se.
Ebtehaj Kalantar, Assistant Disciplinary Counsel, with whom Julia L. Porter,
Deputy Disciplinary Counsel, Myles V. Lynk, Senior Assistant Disciplinary Counsel,
and Sean P. O’Brien, Assistant Disciplinary Counsel, were on the brief, for the
Office of Disciplinary Counsel.
Before BECKWITH and MCLEESE, Associate Judges, and THOMPSON, Senior
Judge.
PER CURIAM: Pamela Bruce Stuart was suspended from the Bar of this court
for one year, with a requirement that she demonstrate fitness to practice law before
being reinstated. In re Stuart, 172 A.3d 393, 394 (D.C. 2017) (per curiam). Ms.
Stuart has filed a petition for reinstatement. After holding an evidentiary hearing, a
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Hearing Committee of the Board on Professional Responsibility recommended that
the court deny the petition. We agree with the Hearing Committee’s
recommendation and deny the petition.
I. Procedural and Factual Background
A. Proceedings in Florida
Ms. Stuart was made a trustee of her father’s trust. A dispute arose about her
performance of that responsibility. Ms. Stuart’s sisters, who are beneficiaries of the
trust along with Ms. Stuart, filed a civil lawsuit against Ms. Stuart in Florida. The
trial court in that case found that Ms. Stuart had breached her fiduciary duties by
loaning herself a substantial amount of money from the trust and by failing to
provide requisite annual accountings. More specifically, the trial court found,
among other things, that Ms. Stuart: (1) failed to appoint an independent co-trustee
as required; (2) instead appointed her brother-in-law, Edward Ryan, as co-trustee
even though she knew he was ineligible to be a trustee; (3) effectively operated
thereafter as a sole trustee; (4) abused her authority as trustee to the detriment of her
sisters; (5) loaned herself over $1.7 million from the trust, without providing
collateral or paying interest as required by the terms of the trust; (6) initially failed
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to inform her sisters of the loans; (7) created a backdated loan agreement between
herself and the trust with respect to the loans; (8) once her sisters and Mr. Ryan
discovered the extent of the loans and expressed concerns, pointed out that Mr. Ryan
was not eligible to be a trustee and caused him to be removed as co-trustee;
(9) threatened to sue Mr. Ryan; (10) claimed that her obligation to repay the loans
she took out should be reduced by trust expenses she had paid, trustee fees, and legal
fees for her services as trustee at a rate of $675 per hour; (11) largely failed to
demonstrate that the loan amount should properly be reduced to reflect trustee fees
or expenses; (12) promised to repay the loans but repeatedly failed to carry through
on those promises, despite having received income that she could have used to at
least partially repay the loans; (13) took steps to shelter income and assets from
creditors, including falsely claiming to be a legal resident of Florida; and
(14) forfeited any right to compensation as a trustee due to her “multiple and flagrant
abuses” of her authority as trustee. The trial court therefore denied Ms. Stuart’s
request for compensation and expenses relating to her service as trustee and awarded
Ms. Stuart’s interests in certain Florida real properties to her co-beneficiaries. The
trial court also entered a deficiency judgment of over $1.7 million against Ms. Stuart.
Ms. Stuart challenged the trial court’s judgment in both state and federal court, but
the judgment was ultimately affirmed.
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Ms. Stuart, who is also a member of the Florida Bar, was charged with
violating the Florida Bar rules. In that disciplinary proceeding, Ms. Stuart pleaded
guilty to “engag[ing] in a pattern of misconduct” in violation of Fla. R. Prof. Conduct
3-4.3 (acts that are “unlawful or contrary to honesty and justice”), 4-8.4(a) (violating
Rules of Professional Conduct), and 4-8.4(b) (acts that “reflect[] adversely on the
attorney’s honesty, trustworthiness, or fitness as a lawyer in other respects”). Ms.
Stuart acknowledged the trial court’s finding that she had breached her fiduciary
duties. The Supreme Court of Florida suspended Ms. Stuart from the practice of law
in Florida for one year.
B. Petition for Reinstatement in the District of Columbia
As previously noted, this court imposed reciprocal discipline, and Ms. Stuart
has now filed a petition for reinstatement. Disciplinary Counsel opposes
reinstatement. Ms. Stuart therefore was required to show by clear and convincing
evidence that she “has the moral qualifications, competency, and learning in law
required for readmission,” and that her “resumption of the practice of law . . . will
not be detrimental to the integrity and standing of the Bar, or to the administration
of justice, or subversive to the public interest.” D.C. Bar. R. XI, § 16(d)(1). When
evaluating a reinstatement petition, we consider the following factors:
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(1) the nature and circumstances of the misconduct for
which the attorney was disciplined; (2) whether the
attorney recognizes the seriousness of the misconduct; (3)
the attorney’s conduct since discipline was imposed,
including the steps taken to remedy past wrongs and
prevent future ones; (4) the attorney’s present character;
and (5) the attorney’s present qualifications and
competence to practice law.
In re Roundtree, 503 A.2d 1215, 1217 (D.C. 1985).
Ms. Stuart’s petition for reinstatement characterized her suspension as the
result of a “family dispute.” Ms. Stuart claimed that she borrowed from the trust as
a result of financial problems caused by a real-estate transaction in which she was
defrauded. She claimed that she had informed her family of her intent to borrow
from the trust to address the situation. She stated that her failure to prepare annual
accountings as required was “reasonable,” based on her many other responsibilities
and her family’s access to information about the trust accounts. She claimed to have
repaid over $700,000 of the money she borrowed from her father’s trust. She
disputed the findings and conclusions of the trial court in the Florida case.
In its answer to the petition, Disciplinary Counsel notified Ms. Stuart that
Disciplinary Counsel intended to rely on the “record of the reciprocal discipline
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matter in this jurisdiction and the underlying civil and disciplinary matters.” Ms.
Stuart filed a pre-hearing motion objecting to, among other things, the consideration
of evidence and exhibits relating to the Florida civil proceedings. The Hearing
Committee denied that motion in relevant part.
C. Evidentiary Hearing
At the evidentiary hearing, Ms. Stuart’s testimony included the following.
Ms. Stuart described her personal and professional background, including her
service with the Federal Trade Commission and the United States Attorney’s Office
for the District of Columbia, as well as her time in private practice both at firms and
as a solo practitioner. After Ms. Stuart’s father died in 1998, Ms. Stuart was
appointed as trustee of her father’s trust. In 2001, Ms. Stuart purchased a
commercial building. Ms. Stuart ended up bringing a lawsuit against the prior owner
of that building, and the resulting litigation contributed to Ms. Stuart’s financial
distress. Ms. Stuart borrowed from the trust during this time, using the proceeds for
personal expenses.
Ms. Stuart acknowledged that she appointed Mr. Ryan as trustee even though
she was aware that he was not qualified to serve under the terms of the trust. She
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expected him to do whatever she asked him to do. She acknowledged that she tried
to have Mr. Ryan removed as co-trustee after he raised obstacles to Ms. Stuart’s
borrowing. In 2009, Ms. Stuart created a backdated loan document between herself
as trustee and herself personally. The loan agreement was not approved by her co-
trustee, did not specify a loan amount, and authorized additional loans.
Ms. Stuart testified that she had informed Mr. Ryan and her sister Catherine
Ryan of her borrowing. Ms. Stuart also explained that after Mr. Ryan was appointed
as co-trustee in 2000, the Ryans received monthly brokerage statements for the trust
account showing Ms. Stuart’s withdrawals. Ms. Stuart believed that members of her
family were “well-informed” of her borrowing from the trust. Ms. Stuart agreed,
however, that the brokerage statements alone were insufficient to provide an
accounting, because they only showed the amount of funds that were withdrawn and
not how they were being spent.
Ms. Stuart acknowledged that she “overborrowed” from the trust and failed to
file annual accountings. She “recognize[d]” that it was “serious error amounting to
misconduct to fail to complete the annual accountings of [her] father’s trust in a
timely manner.” She explained that she was overwhelmed by her many
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responsibilities, including caring for her mother, managing the trust, and
representing her clients.
Ms. Stuart claimed that some of the withdrawals were for trustee fees and
expenses, and the rest of the withdrawals were loans against her anticipated fees and
inheritance. Ms. Stuart claimed that she was owed over $1.4 million from the trust
to compensate her for trustee fees and expenses. Ms. Stuart acknowledged that she
did not create contemporaneous records of the hours she spent working as trustee.
Ms. Stuart maintained, however, that she had contemporaneous records because she
kept receipts that she used to estimate her hours after the fact.
Although Ms. Stuart received several large payments after she began
borrowing from the trust, she did not use those funds to repay the trust. Ms. Stuart
did at one point transfer $200,000 to her mother’s account, which Ms. Stuart
regarded as repayment to the trust. Ms. Stuart described the Florida default judgment
against her as “something of a fiction,” and she testified that she believed that “did
the best [she] could under very difficult circumstances.” Ms. Stuart acknowledged
that after she was disciplined by the Florida Bar, she did not repay any funds to the
trust or pay any restitution. Ms. Stuart claimed that she was unable to pay such
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restitution, but she acknowledged using funds to pay personal expenses such as
membership in a country club and a social club.
Ms. Stuart called eight character witnesses and submitted letters from two
other character witnesses. Those witnesses testified very favorably about Ms.
Stuart’s ability and character. They also testified to their apparently limited
knowledge of the circumstances of Ms. Stuart’s underlying misconduct. For
example, one witness described that misconduct as excessive borrowing and failure
to provide accountings, but the witness said that she did not have all of the details,
that Ms. Stuart had never said how much she borrowed, and that her understanding
was that Ms. Stuart’s sisters had agreed to the loans. Another described the situation
as a “family tiff” involving a failure to file accountings. That witness did not know
how much Ms. Stuart had borrowed from the trust and believed that Ms. Stuart’s
family had information about the borrowing. Other witnesses also described the
underlying misconduct as a family issue and lacked details about the misconduct.
Disciplinary Counsel introduced the following evidence. In a series of
withdrawals between 1998 and 2013, Ms. Stuart took approximately $1.8 million
from her father’s trust. Ms. Stuart’s sister Catherine Ryan was aware “early on” that
Ms. Stuart was taking some money out of the trust, but Ms. Ryan understood that
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the problem would not be a long-term one. She and her husband tried to help Ms.
Stuart, so that Ms. Stuart would stop taking money from the trust. Ms. Stuart
repeatedly promised to pay the money back.
Mr. Ryan also had been aware that Ms. Stuart was taking some money from
the trust. Sometime around 2003, Mr. Ryan realized that Ms. Stuart had taken a
substantial amount of money (over $800,000) from the trust. Ms. Stuart did that
without obtaining Mr. Ryan’s approval. Mr. Ryan asked Ms. Stuart about the
withdrawals, and she said that she would return that money to the trust once she
received proceeds from a case that she had been handling. At the time she withdrew
the loans, Ms. Stuart did not provide collateral or identify an interest rate at which
she would repay her debt.
Ms. Stuart continued to remove money from the trust in the ensuing years, but
she agree to repay the money once she obtained proceeds from the sale of the
commercial building she had purchased. Ms. Stuart did not do that, however, instead
putting the bulk of those proceeds (approximately $1.5 million) into accounts that
Ms. Stuart controlled and not paying any of the proceeds to the trust account. In
2010, Mr. Ryan emailed Ms. Stuart demanding information, and Ms. Stuart did not
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respond. Around that time, Ms. Stuart demanded that Mr. Ryan resign as co-trustee
and threatened to sue him.
In 2012, Ms. Stuart presented the Ryans with a written Plan of Trust
Administration to wrap up the estate. By that point, Ms. Stuart had taken
approximately $2 million from the trust. Ms. Stuart also presented the Ryans with a
loan agreement between herself as trustee and herself personally. Mr. Ryan had not
previously seen that agreement, had not been aware of the agreement’s existence,
and had not approved the agreement. The Plan also claimed that Ms. Stuart was
entitled to fees and expenses but did not provide an exact amount. Ms. Stuart later
claimed that she was entitled to approximately $1.4 million in fees and $300,000 in
expenses.
D. Hearing Committee Recommendation
The Hearing Committee made extensive factual findings. The Committee
found the Ryans’ testimony to be credible, clear, and corroborated by
contemporaneous documents. In contrast, the Committee found Ms. Stuart’s
testimony to be evasive, vague, and false in a number of respects.
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Applying the Roundtree factors, the Committee first concluded that the nature
and circumstances of Ms. Stuart’s misconduct were serious and disfavored
reinstatement. Ms. Stuart took well over one million dollars from the trust without
the full consent or knowledge of her co-trustee or co-beneficiaries, used those funds
for her personal expenses, failed to provide required trust accountings, and made
virtually no effort to repay the funds she took. The Committee was not persuaded
by Ms. Stuart’s suggestions that she should have been disciplined less severely
because her misconduct arose (1) from a “family matter” rather than a client matter
and (2) at least in part because she was overwhelmed by business and personal
concerns.
Second, the Committee concluded that Ms. Stuart’s failure to present clear
and convincing evidence that she recognized the seriousness of her misconduct
strongly counseled against reinstatement. Ms. Stuart repeatedly attempted to justify
her conduct, minimized the importance of providing accountings, and focused much
of her testimony on expressing the view that the Florida courts had treated her
unfairly and on criticizing her family members.
Third, the Committee concluded that Ms. Stuart’s conduct during her
suspension weighed against granting her reinstatement petition. Although Ms.
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Stuart took continuing legal education classes during her suspension and
successfully performed legal work in Virginia once she was reinstated to the Virginia
Bar, the Committee found that Ms. Stuart had taken no steps to reimburse the trust
or her sisters. The Committee further declined to credit Ms. Stuart’s claim that she
was entitled to the money she took from the trust, as payment for trustee fees and
expenses.
Fourth, the Committee determined that Ms. Stuart’s present character does not
support reinstatement. Ms. Stuart’s witnesses spoke highly of her character, but they
were unfamiliar with the specifics of Ms. Stuart’s misconduct and even minimized
that misconduct. Moreover, the Committee concluded that Ms. Stuart’s testimony
and conduct during the disciplinary proceedings revealed an “inability to meet her
personal and professional obligations and deadlines” and that Ms. Stuart had failed
to show that she was “successfully managing the traits that led to her discipline.”
Finally, the Committee acknowledged Ms. Stuart’s participation in continuing
legal education courses during her suspension and her work in Virginia after her
reinstatement there. Nevertheless, the Committee concluded that Ms. Stuart had
failed to demonstrate that her present competence and qualifications favored
reinstatement. The Committee cited Ms. Stuart’s failure to abide by previously
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agreed-upon procedures and deadlines, as well as Ms. Stuart’s reliance on
“inapposite precedent” and voluminous, duplicative, and largely irrelevant evidence
to support her petition for reinstatement.
II. Analysis
“Although we place great weight on the recommendation[] of the . . . Hearing
Committee, this court has the ultimate authority to decide whether to grant a petition
for reinstatement.” In re Sabo, 49 A.3d 1219, 1224 (D.C. 2012) (citation and internal
quotation marks omitted). We defer to the Hearing Committee’s findings of fact,
including credibility determinations, unless those findings are not supported by
substantial evidence. In re Cleaver-Bascombe, 220 A.3d 266, 267, 270 (D.C. 2019)
(per curiam).
We generally agree with the Hearing Committee’s analysis of the Roundtree
factors, and we accept the Committee’s recommendation that Ms. Stuart’s petition
for reinstatement should be denied. We do note, however, that although we share
the Committee’s concerns about Ms. Stuart’s conduct during the course of the
reinstatement proceeding, we need not and do not rely on that consideration in
denying Ms. Stuart’s petition. Similarly, we need not and do not rely on evidence
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elicited during the proceedings about Ms. Stuart’s failure to file timely tax returns,
both as a trustee and personally. In our view, the remaining circumstances more
than suffice to warrant denial of reinstatement. We are not persuaded by Ms. Stuart’s
arguments to the contrary.
First, Ms. Stuart appears to argue that the Hearing Committee and this court
are required to limit the inquiry into the nature and circumstances of the misconduct
for which Ms. Stuart was disciplined to the precise facts reflected in the conditional
guilty plea in Florida. That argument contradicts Ms. Stuart’s own petition for
reinstatement, which made numerous factual assertions about the circumstances of
her misconduct that were not reflected in the Florida guilty plea but that Ms. Stuart
contended mitigated the severity of her misconduct. Ms. Stuart thus is not in a
position to complain that Disciplinary Counsel responded by arguing to the contrary
that a full picture of the nature and circumstances of Ms. Stuart’s misconduct
weighed against reinstatement. Cf., e.g., Harrison v. United States, 526 A.2d 1377,
1379 (D.C. 1987) (party cannot complain of admission of evidence “relating to a
subject that [the party] opened up”).
In any event, we see no basis for a rule that would strictly limit the inquiry
into the nature and circumstances of the misconduct for which an attorney was
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disciplined to the precise facts found when the discipline was imposed. An attorney
seeking reinstatement might well reasonably wish to provide additional information
about those circumstances in support of a petition for reinstatement, and Disciplinary
Counsel might well seek to do the same in opposition to such a petition. More
difficult issues might arise if Disciplinary Counsel sought to establish that an
attorney seeking reinstatement had committed different, uncharged disciplinary
violations at the time of the original discipline. In our view, however, Disciplinary
Counsel did not seek to prove different and additional disciplinary violations in this
case. Rather, Disciplinary Counsel permissibly attempted to show that a full picture
of the disciplinary violations found in this case showed that the misconduct for
which Ms. Stuart was disciplined was more serious than Ms. Stuart claimed.
Ms. Stuart argues that permitting such a broad inquiry is inconsistent with
statements in our decisions to the effect that a reinstatement proceeding is not
intended to “revisit” the original discipline. See, e.g., In re Stanton, 757 A.2d 87, 90
(D.C. 2000) (per curiam) (internal quotation marks omitted). In our view, Ms. Stuart
takes those statements out of context. We have said that an attorney seeking
reinstatement is not permitted to challenge the validity of the original discipline. Id.We have not suggested, however, that the reinstatement inquiry must be limited to
the precise facts found in the original discipline. Ms. Stuart also argues that
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permitting a broader inquiry contradicts cases requiring that reciprocal discipline be
based on “facts that were accepted by the highest court of the foreign jurisdiction.”
In re Naegele, 225 A.3d 984, 994 (D.C. 2020) (per curiam). That principle applies
to the original imposition of reciprocal discipline, because in such proceedings this
court generally relies on the determinations made in the foreign jurisdiction and
generally attempts “to impose the discipline that comes as close as possible to the
discipline imposed by the originating jurisdiction.” Id. at 997. We have never
suggested that the principle applies in reinstatement proceedings, which are focused
on whether an attorney should be restored to the practice of law in the District of
Columbia under the circumstances at the time of the petition for reinstatement.
Second, Ms. Stuart argues that the Hearing Committee could not properly
consider the factual findings made in the Florida civil case. We disagree. We see
no reason why the Hearing Committee and this court, when considering a
reinstatement petition, cannot at least consider factual findings made by a
preponderance of the evidence in a separate judicial proceeding. We need go no
further in this case, moreover. Although the Hearing Committee cited the Florida
trial-court ruling, the Hearing Committee did not give preclusive effect to that ruling,
and the Hearing Committee’s key factual findings are supported by evidence
admitted at the evidentiary hearing in this case. Similarly, we rest our decision to
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deny the reinstatement petition on the evidence introduced in this proceeding, not on
the findings of the Florida trial court. In light of this conclusion, we need not and
do not express any view on the potential applicability of issue preclusion in
reinstatement proceedings. See generally In re Klayman, 282 A.3d 584, 593 (D.C.
2022) (per curiam) (declining to resolve unclear question about application of
preclusion in disciplinary proceedings). We do note, however, that the cases cited
by Ms. Stuart on this issue do not clearly support Ms. Stuart’s argument. Those
cases held that findings in a prior proceeding not involving attorney discipline and
involving a less stringent burden of proof cannot properly be given preclusive effect
against attorneys in initial discipline proceedings, because in initial discipline
proceedings Disciplinary Counsel bears the burden of proof by clear and convincing
evidence. In re Ditton, 954 A.2d 986, 990 (D.C. 2008); In re Maxwell, 798 A.2d
525, 530 (D.C. 2002). Those cases do not govern the potential applicability of
preclusion in reinstatement cases, where the attorney seeking reinstatement bears the
burden of proof by clear and convincing evidence.
Third, Ms. Stuart argues that this court’s decision suspending Ms. Stuart
explicitly rejected the theory that Ms. Stuart’s misconduct could be understood more
broadly than was reflected in the Florida guilty plea. To the contrary, this court’s
decision simply observed that Ms. Stuart had “stipulated to the factual basis
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underlying her Florida discipline.” In re Stuart, 172 A.3d at 394. We expressed no
view about how the nature and circumstances of Ms. Stuart’s misconduct should be
viewed if Ms. Stuart sought reinstatement. Id.Fourth, Ms. Stuart argues that she lacked notice of Disciplinary Counsel’s
intent to present evidence of “unadjudicated misconduct” before the Hearing
Committee. As we have explained, however, we view the evidence as directed at
establishing the nature and circumstances of the conduct for which Ms. Stuart was
disciplined, not at proving unadjudicated misconduct. Moreover, Disciplinary
Counsel’s response to Ms. Stuart’s petition for reinstatement gave Ms. Stuart notice
of Disciplinary Counsel’s “inten[t] to rely on the record of the reciprocal discipline
matter in this jurisdiction and the underlying civil and disciplinary matters.” To the
extent that Ms. Stuart complains about a lack of specific notice that evidence would
be presented about her failure to file tax returns, we need not address that issue
because we place no reliance on the evidence relating to that issue.
Finally, Ms. Stuart raises numerous other challenges in conclusory fashion,
including challenging almost all of the Hearing Committee’s factual findings. We
decline to address these challenges. See generally, e.g., Miller v. United States, 209
A.3d 75, 80 (D.C. 2019) (declining to address issue not adequately briefed on
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appeal). We do note, however, that we have determined that the critical factual
findings of the Hearing Committee are amply supported by the evidence before the
Hearing Committee.
In sum, we conclude that Ms. Stuart has failed to carry her burden to establish
that reinstatement is warranted. We therefore deny the petition for reinstatement.
So ordered.