Marx Brothers’ attorney disbarred for taking funds from trust

EDWARD EZOR [#50469], 74, of Pasadena, was disbarred Oct. 23, 2015 after unsuccessfully appealing a State Bar Court hearing judge’s recommendation he be disbarred for willful misappropriation of $37,247.22 and “failing to maintain funds in trust for an elderly, disabled client.” Ezor claimed the misappropriation was the result of an accounting error, an explanation a three-judge review panel rejected.

“This case illustrates the dire consequences an attorney may face when he allows financial self-interest to override his fiduciary responsibilities to a client,” Presiding Judge Catherine D. Purcell wrote on behalf of the panel.

In 1999, Ezor began representing Maxine Marx, the daughter of Chico Marx, collecting the movie royalties from two Marx Brothers’ movies, “A Day at the Races” and “A Night at the Opera,” and allocating them to Maxine and Chico’s other beneficiaries. When Maxine died in 2009, Ezor was supposed to be maintaining $26,001.48 in trust on behalf of her estate.

Brian and Keith Culhane, Maxine’s sons, the sole beneficiaries of her will and co-executors of her estate, were unaware of the movie rights and believed their mother had died penniless until receiving a notice from the Internal Revenue Service that she owed substantial back taxes on the movie royalties. When they contacted Ezor, he told them he was holding about $20,000 on Maxine’s behalf.

“For the next two years, Brian and Kevin sought information from Ezor about the royalties, his fees and his retainer agreement with Maxine,” Purcell wrote. “Ezor either ignored the inquiries or provided incomplete, irrelevant and insufficient responses.”

At trial, evidence revealed that Ezor had collected nearly $200,000 in royalties on Maxine’s behalf, which he deposited in his client trust account, deducting his fees and using the money to pay Maxine’s debts and expenses. But he did not have a written fee agreement and was unable to produce receipts, documents or other records showing that Maxine authorized the disbursements, the panel noted.

Although he was required to maintain a balance of more than $26,000 as of Dec. 31, 2009, he allowed the balance in his trust account to drop as low as $1,008.28. In December 2010 and December 2011, Ezor received additional royalties, bringing the amount he was supposed to be safeguarding for the estate to $41,399.46. On Feb. 12, 2012, the balance in his client trust account was only $4,152.26. After the State Bar contacted him, he repaid the bulk of the money he owed to the estate.

In his appeal Ezor claimed he accidently misallocated monies due to an accounting error tied to the sale of a painting owned by a relative, though his explanation was not credible and changed over the course of discipline proceedings, the panel wrote.

“Ezor’s refusal to provide basic information to Maxine’s sons regarding her accounts further undermines his claim of an honest accounting mistake,” Purcell wrote. “Brian and Kevin, personally and through counsel, tried unsuccessfully to obtain information about the royalty funds and Ezor’s fee agreement with Maxine. Brian testified he ‘couldn’t even get a straight answer’ to simple questions.”

Although Ezor had no prior record of discipline in many years of practicing law, the panel gave it minimal credit in mitigation due to the serious nature of his misconduct. He was ordered to comply with rule 9.20 of the California Rules of Court and to pay $474.38 plus interest in restitution.