Judge: Mary H. Strobel, Case: 21STCP01509, Date: 2022-12-19 Tentative Ruling

Hon. Mary H. Strobel

The clerk for Department 82 may be reached at (213) 893-0530.

Case Number: 21STCP01509    Hearing Date: December 19, 2022    Dept: 82

The State Bar of California (“Petitioner” or “State Bar”) moves “for final orders for the disposition of client files and other property and disbursement of funds remaining in the client trust account maintained by deceased attorney Michael David Randall at JP Morgan Chase Bank, account no. xxxxx7800.”  (Mot. 2.)

Relevant Procedural History

On May 11, 2021, Petitioner filed a petition for assumption of jurisdiction over the law practice of Michael David Randall. 

On August 11, 2021, Petitioner filed and served its noticed motion for order assuming jurisdiction over the law practice of Michael David Randall.  No opposition was received.

On September 2, 2021, after a hearing, the court granted Petitioner’s motion for an order assuming jurisdiction over the law practice of Michael David Randall.

At a status conference held on July 7, 2022, the court set a hearing for Petitioner’s motion to disburse for September 1, 2022. 

On August 24, 2022, Petitioner filed and served a status report stating that “the State Bar has obtained the decedent’s files, identified his outstanding client matters, conducted an audit of his accounts, obtained proof of payments made by clients, and is now preparing Disbursal Motion by which it will seek an order from the court for the distribution of funds remaining in the client trust account maintained by Michael David Randall.”  Petitioner stated that it “is in the process of obtaining declarations from each refund claimant, and will file the declarations and exhibits in support thereof, in Disbursal Motion that the State Bar anticipates filing by the end of this month.” 

On September 1, 2022, in light of this status report, the court denied without prejudice Petitioner’s first motion to disburse. 

On October 31, 2022, Petitioner filed this motion for final orders for disposition of client files and property and disbursement of funds in trust. 

On November 1, 2022, Petitioner filed proof of service showing that Petitioner served the motion on 11 interested persons, by mail or electronic service, on November 1, 2022.

No opposition has been received. 

Summary of Applicable Law

Business and Professions Code section 6180 provides that: “When an attorney engaged in law practice in this state dies… notice of cessation of law practice shall be given and the courts of this state shall have jurisdiction, as provided in this article.”  (Bus. & Prof. Code § 6180.) The State Bar or “an interested person” may apply for the superior court of the county in which the member resides or most recently practiced law to assume jurisdiction over that practice.  (Id., § 6180.2.)

If the court finds that the supervision of the courts is warranted and the statutory requirements are met, then it may make such further orders as necessary to carry out the purpose of the statutory scheme.  (Id. § 6180.5.)

Analysis

Notice

On November 1, 2022, Petitioner filed proof of service showing that Petitioner served the instant motion on 11 interested persons, by mail or electronic service, on November 1, 2022.. 

The court notes that many of the interested parties have filed declarations in support of the motion.  No opposition to the motion has been received.  In the absence of any opposition or objection, the court is tentatively inclined to find adequate notice to all interested persons.  (See Bus.  & Prof. Code § 6180.4 [“The court may prescribe additional or alternative methods of service of the application and order to show cause, and may prescribe methods of notifying and serving notices and process upon other persons and entities in cases not specifically provided for herein.”].)  Except with respect to the proposed transfer of remaining funds to the State Bar Client Security Fund, discussed further below, notice appears proper.

Client Files

            Petitioner seeks orders specifying as follows:

1. The State Bar of California may destroy immediately any client property or client files of Michael David Randall for which written authorization to destroy has been obtained from the client.

2. The State Bar of California shall store all other undistributed client files and other client property in its possession from the law practice of Michael David Randall wherein no authorization to destroy has been obtained until September 2, 2023.

3. The State Bar of California shall be entitled to destroy or otherwise dispose of any and all client files and other client property from the law practice of Michael David Randall which remain in the State Bar of California’s possession and undistributed after September 2, 2023.

(Proposed Order ¶¶ 1-3.)

Randall had ongoing client matters and no succession plan when he died.  Pursuant to this court’s order assuming jurisdiction over Randall’s law practice, Petitioner has obtained Randall’s remaining client files and property.  To date, not all client files and other property have been claimed.  (Voskanian Decl. ¶¶ 4-5, 16.)  Accordingly, these proposed orders are justified. 

Client Funds and Reimbursement Requests

            Petitioner seeks an order authorizing the disbursement of $24,000 in total funds from Randall’s Client Trust Account at JP Morgan Chase Bank, account no. xxxxx78000 in the following amounts and to the following individuals: 

1) $1,500 to Francis Cook;

2) $4,500 to David Dunlap;

3) $2,500 to Joshua Merrill;

4) $2,250 to Marleny Recinos;

5) $4,500 to Antonio Rodriguez, Jr.;

6) $2,000 to Pamela Tripp;

7) $2,500 to Durky Trochez;

8) $2,250 to Jael Vigil; and

9) $2,000 to Alyssa Speaks.

Petitioner also seeks to disburse the remaining proceeds from Randall’s Client Trust Account to the State Bar of California, Client Security Fund.

(Proposed Order ¶¶ 4-5.)

Petitioner has conducted an audit of Randall’s files to determine the amounts clients claiming refunds are owed, and also to determine whether other clients are owed refunds.  Based on that audit, Petitioner has determined that the persons specified above are entitled to and should be paid out the amounts stated above.  Those amounts total $24,000.  (Voskanian Decl. ¶¶ 10-14; Master Decl. generally.) Petitioner submits declarations from most of the persons specified above that corroborate the amounts of refunds stated.  (See Cook Decl.; Dunlap Decl.; Merrill Decl.; Recinos Decl.; Rodriguez Decl.; Tripp Decl.; Trochez Decl.; and Master Decl.)  The court finds this evidence persuasive and concludes that it supports the proposed order of disbursement. 

Disbursement of Trust Account Balance to State Bar of California Client Security Fund

The balance in Randall’s Trust Account is $34,981.88. (Voskanian Decl. ¶¶ 10, 12-14.) If all nine claims are paid at 100%, the remaining balance in the Trust Account will be $10,981.88. (Ibid.) Petitioner seeks an order to deposit any funds remaining in the Trust Account on September 2, 2023, into the State Bar of California Client Security Fund (“CSF”).  The court has two concerns.  The declarations in support of the motion imply but do not state that the accounting records required to be kept by Mr. Randall were insufficient to determine the source of the funds in the Client Trust Account.  If that is the case, the court questions whether the remaining moneys may represent earned but not withdrawn moneys belonging to Mr. Randall.  It may be that the heirs or estate of Mr. Randall should have received notice of the proposed transfer of the remaining funds to the CSF.  Petitioner has not provided information whether there is a probate estate or identifiable heirs for Mr. Randall.

The court’s second concern is the propriety of transferring the money to the CSF rather than to the State as unclaimed property.  The only authority cited for this disposition of remaining funds is the court’s general authority to make all orders “necessary or appropriate” to carry out the purposes of the article.  Petitioner has not explained why dispersal to the CSF is necessary or appropriate, or why transfer to the CSF is superior to having the money escheat to the state where it could potentially be claimed by those claiming an interest.

Counsel should address these issues at the hearing.

Conclusion

            The motion is GRANTED with respect to disbursement of funds to identified clients.  Petitioner should address the questions raised by the court with respect to its request that the remaining funds be disbursed to the State Bar Client Security Fund.