DAVID RICHARD SCHWARCZ (“Respondent”) admits that the following facts are true and that he is culpable of violation of the specified statute and/or Rule of Professional Conduct.
Case No. 04-0-14445 (Complainant: Scott P. Schomer obo Helene Lederman)
1. In February 1999 Mrs. Lederman was introduced to Respondent and his wife, Caroline Schwarcz (“the Schwarczes”). Mrs. Lederman knew the Schwarczes were interested in buying her
home, located on Hillcrest Avenue in Beverly Hills, California (the “Hillcrest property.”) At the time the Hillcrest property was worth an estimated $1.5 million, although there were liens encumbering the house, incurred at least in part by Mrs. Lederman’s ex-husband’s misdeeds, which totaled approximately $2.8 million.
2. The Schwarczes told Mrs. Lederman that they were aware there were $2.8 million in liens encumbering the Hillcrest property, and that Mrs. Lederman was in danger of losing the home due to the liens greatly outweighing the home’s value. Respondent told Mrs. Lederman that he could reduce or eliminate the liens on the Hillcrest property in a transaction whereby she would sell the Hillcrest property to the Schwarczes and receive some money, with the exact amount dependent on Respondent’s success in reducing or eliminating liens.
3. After Mrs. Lederman’s discussion with Respondent, in March 1999 Mrs. Lederman entered into a transaction whereby she retained Respondent to attempt to reduce the liens on the Hillcrest
property, and agreed to transfer the Hillcrest property to the Schwarczes. The Schwarczes originally agreed that they would pay Mrs. Lederman $125,000 at the time the title to the Hillcrest property was transferred. The balance of the purchase price would be paid over time, and would vary considerably depending on the extent to which Respondent could reduce the liens through negotiation or litigation. Respondent also explained to Mrs. Lederman that it could be five years before she received all of the payments because of the work required to reduce the various liens.
4. Respondent’s purchase of the Hillcrest property was a business transaction between Respondent and his client Mrs. Lederman, in which Respondent knowingly acquired an ownership,
possessory, security, or other pecuniary interest adverse to his client Mrs. Lederm… (Read on at the link above.)
No Prior Record of Discipline: Respondent has no prior record of discipline but had only been practicing law for approximately eight years when the first misconduct in this matter occurred. Prior to that Respondent had practiced law in New York, with no record of public discipline. Even though the misconduct here is serious, Respondent is entitled to mitigation for lack of prior record of discipline. (Hawes v. State Bar (1990) 51 Cal.3d 587, 596 [ten years’ practice prior to misconduct entitle to “significant weight” in mitigation].)
Pretrial Stipulation: Respondent has agreed to enter into this pre-trial stipulation to fully resolve this matter without the necessity of a complex and lengthy trial, thereby saving the State Bar time and resources. (Silva-Vidor v. State Bar (1989) 49 Cal.3d 1071, 1079 [mitigative credit given for entering into a stipulation as to facts and culpability].)
Good Character: Respondent has provided the State Bar with several good character declarations which provide a demonstration of Respondent’s good character attested to by a wide range
of references in the legal and general communities who are aware of the full extent of his misconduct. (Std. 1.2(e)(vi).)
Passage of Time: Several years have passed since the acts of professional misconduct occurred. (Std. 1.2(e)(viii).) There is no evidence that Respondent has committed any further misconduct from 1999 up through the present date. (ln the Matter of DeMassa (Review Dept. 1991) 1 Cal. State Bar Ct. Rptr. 737 [lack of prior record of discipline in only eight years’ practice not entitled to significant weight, however attorney practiced without incident for another twelve years after misconduct and thus the court took this into account, concluding that the misconduct was aberrational and unlikely to recur.