detrimental effects such a move could have on him. Schulze testified at
the disciplinary hearing that Bayler terminated his representation at that
time. Shortly after Bayler and Preece moved to Wyoming, Schulze took
measures to sell Preece and Bayler's residence, which was owned by the
trust. Schulze did not notify or seek permission from the district court to
sell the residence because he did not believe that he had a duty to do so.
The proceeds of the sale were deposited into the trust. In September 2009,
Schulze paid Bayler for costs related to the move to Wyoming and rent to
the owner of the home where Bayler and Preece lived. Schulze also
continued to pay Bayler a monthly sum of $3,000 for her services as
guardian. Several months later, in January 2010, there was a domestic
disturbance at Bayler and Preece's residence, resulting in Preece's
removal from the home and admission to a psychiatric hospital. Preece
was eventually moved to a group home. Schulze paid the costs of Preece's
hospitalization and stay at the group home in the amount of $26,000.
Schulze also continued to pay Bayler her caretaking fee of approximately
$3,000 per month, although Preece did not live with her during that time.
Schulze continued paying Bayler's fee based on her assurances that Preece
would soon be living with her. However, Preece never again lived with
Bayler. Schulze also continued to pay Bayler's rent. In January 2011,
nearly one year after Preece was removed from Bayler's care, Schulze
informed Bayler that he would no longer pay her caretaking fee.
In January 2012, Schulze filed a report and accounting of the
trust and, for the first time, advised the district court of Bayler and
Preece's move to Wyoming and sale of the Nevada residence. In addition
to his trustee fees ($400 per month) Schulze requested additional attorney
fees and termination of the guardianship pursuant to NRS 159.191. The
report showed that, inconsistent with Schulze's assertion that Bayler
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terminated his representation in 2009, substantial amounts of his request
for additional fees consisted of "post-termination" work that could only be
related to his representation of Bayler. Between 2007 and 2008, the trust
was valued at approximately $450,000. In June 2012; the trust had
approximately $140,000 in assets.
Schulze's January 2012 report generated concern by the
district court (Judge Walker) and an investigation into Schulze's handling
of the trust and Bayler's actions as guardian was launched. After the
investigation, the district court removed Bayler as Preece's guardian and
Schulze as trustee and appointed the Washoe County Public Guardian as
guardian and trustee. Ultimately, the district court issued a contempt
order against Schulze and Bayler. Among other things, the district court
noted in the order that Schulze minimized his failure to file annual trust
accountings, which led to "massive waste" of trust funds. The district
court also concluded that his representations during the contempt
proceedings were "transparent attempts to minimize and prevaricate in
order to recast history and/or to project blame for his non-reporting on
either the Court or his client (Bayler)" and that some of his testimony was
belied by the evidence. The district court sentenced Schulze to serve two
consecutive terms of ten days in jail, suspended for three years on the
condition that he repaid all monies expended by the trust between 2007
and 2012. By the time of the disciplinary hearing, Schulze had repaid the
trust $26,223.41.
The panel found that Schulze violated RPC 1.7(a)(1), (2)
(conflict of interest: current clients), RPC 3.3 (candor toward the tribunal),
and RPC 8.4(c), (d) (misconduct: engaging in conduct involving dishonesty,
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fraud, deceit or misrepresentation and engaging in conduct that is
prejudicial to the administration of justice). 1 The panel did not identify
any specific aggravating factors but noted that Schulze expressed little
remorse for the effect that his actions had on the ward of the trust.
Further, the panel gave "some weight" to mitigation evidence showing that
several of Schulze's family members experienced severe health issues,
including the death of his mother and brother and ongoing medical issues
involving his wife. Based on the violations found, the panel recommended
that Schulze be suspended from the practice of law for six months but that
the suspension be stayed and that he be issued a public reprimand.
Further, if Schulze is the subject of additional bar complaints during the
period of stayed suspension, the panel will reconvene to determine
whether additional discipline is warranted. The panel also recommended
that Schulze pay the costs of the proceeding, excluding bar counsel and
staff salaries.
The State Bar has the burden of showing by clear and
convincing evidence that Schulze committed the violations charged. In re
Discipline of Drakulich, 111 Nev. 1556, 1566, 908 P.2d 709, 715 (1995).
We "employ a deferential standard of review with respect to findings of
fact." In the Matter of Amendments to Court Rules Regarding Attorney
Discipline, Specifically SCR 105, ADKT No. 0505 (Order Amending
Supreme Court Rule 105, November 5, 2015), as we do in civil cases, see
SCR 105(3)(a) ("To the extent not inconsistent with these rules, as appeal
from a decision of a hearing panel shall be treated as would an appeal
'The panel found that Schulze did not violate RPC 1.5 (fees), RPC
1.6 (confidentiality of information), or RPC 4.1 (truthfulness in statements
to others) as alleged in the complaint.
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from a civil judgment of a district court. . . ."). Our review of a disciplinary
panel's recommendations is de novo, SCR 105(3)(b); In re Discipline of
Stuhff, 108 Nev. 629, 633, 837 P.2d 853, 855 (1992), and therefore we
"must examine the record anew and exercise independent judgment," In re
Discipline of Schaefer, 117 Nev. 496, 515, 25 P.3d 191, 204 (2001).
While we conclude that substantial evidence supports the
panel's findings of misconduct, see generally Sowers v. Forest Hills
Subdivision, 129 Nev., Adv. Op. 9, 294 P.3d 427, 432 (2013) (observing
that this court will uphold district court's factual findings "as long as these
findings are not clearly erroneous and are supported by substantial
evidence"); Weddell v. H20, Inc., 128 Nev., Adv. Op. 9, 271 P.3d 743, 748
(2012) (same), we do not agree that the panel's recommended discipline is
appropriate under the circumstances, see State Bar of Nev. v. Claiborne,
104 Nev. 115, 213, 756 P.2d 464, 527-28 (1988) (observing that purpose of
attorney discipline is to protect the public, the courts, and the legal
profession, not to punish the attorney). Schulze's actions caused the
significant depletion of trust funds designated to take care of Preece, a
vulnerable, mentally disabled person. Further, the contempt order shows
that when called to explain his actions related to his management of the
trust, he was not candid with the district court. To his credit, Schulze has
repaid the trust, but that does not excuse or diminish the harm caused by
his actions. Therefore, we conclude that a term of actual suspension is
warranted. See ABA Standards for Imposing Lawyer Sanctions,
Compendium of Professional Responsibility Rules and Standards,
Standard 4.32 (2015) (indicating that suspension is appropriate for failing
to avoid conflicts of interest where a "lawyer knows of a conflict of interest
and does not fully disclose to a client the possible effect of that conflict and
causes injury or potential injury to a client"); id. Standard 6.12 (indicating
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that suspension is appropriate where a "lawyer knows that false
statements or documents are being submitted to the court or that material
information is improperly being withheld, and takes no remedial action,
and causes injury or potential injury to a party to the legal proceeding, or
causes an adverse or potentially adverse effect on the legal proceeding").
Accordingly, we hereby suspend Richard P. Schulze from the practice of
law for one year commencing from the date of this order. Further, Schulze
shall pay the costs of the disciplinary proceeding, excluding bar counsel
and staff salaries, see SCR 120, and shall comply with SCR 115 and SCR
116. The State Bar shall comply with SCR 121.1.
It is so ORDERED.
(--Le1 / 41"- , C.J.
Hardesty
4:1)1
Parraguirre
("tr DougAas-
as J.
Saitta
Gibbons Pickering
cc: Chair, Northern Nevada Disciplinary Panel
Bar Counsel, State Bar of Nevada
Lemons, Grundy & Eisenberg
Kimberly K. Farmer, Executive Director, State Bar of Nevada
Perry Thompson, Admissions Office, United States Supreme Court
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