State Bar Accuses Mitchelson of Misuse of Funds

The State Bar of California on Friday accused Los Angeles matrimonial lawyer Marvin Mitchelson of violating professional standards by mishandling clients’ funds.

Mitchelson, who earned fame in the 1970s as the lawyer who successfully argued for the creation of palimony for unwed couples who separate, could face discipline ranging from a simple warning to disbarment.

The State Bar’s office of trial counsel filed documents asserting that “reasonable cause has been found” to conduct a formal disciplinary hearing into charges that Mitchelson failed to promptly return unearned fees to three clients who fired him and never returned unearned fees to a fourth client.

The clients include actress Julie Newmar and Eleanor Revson, sister-in-law of the founder of Revlon cosmetics.

The State Bar also charged that Mitchelson failed to deposit clients’ funds in trust accounts, charged “unconscionable” fees, showed a lack of diligence, made a false representation to a client and twice improperly asked a client to withdraw her complaint to the State Bar during negotiations over the return of unearned fees.

Mitchelson was also accused of knowingly misrepresenting facts while prosecuting a frivolous appeal in state court. He has already been fined $25,000 by the court for that case. In addition, he was accused of filing another “meritless legal action,” for which an appeals court fined him $15,000.

Wrongdoing Denied

Mitchelson, reached in Tokyo where he said he was on business, denied any wrongdoing.

“I believe all these cases are completely defensible. . . . None of my arrangements with the clients required that I place any money in trust accounts. They were nonrefundable retainers . . . and all these people’s best interests were served while I represented them.”

He declined to go into more detail, saying he would save that for the State Bar court where he will have an opportunity to show cause why a disciplinary hearing should not be held.

Mitchelson’s lawyer, Arthur Margolis, declined to comment, saying, “We have not been served with (the State Bar’s papers) yet.”

State Bar senior trial counsel Victoria R. Molloy, who prepared the case against Mitchelson, said her office is also investigating allegations made by two former clients that Mitchelson sexually assaulted them. These allegations are not part of the State Bar’s charges against Mitchelson.

The assault cases--one of which involved a claim of rape--were previously investigated by the Los Angeles County district attorney’s office, which concluded in 1987 that there was “insufficient evidence to establish that any crime was committed.”

No Action by Attorney General

However, after one of the alleged victims complained that Mitchelson was accorded preferential treatment by the district attorney’s office, the state attorney general’s office examined her complaint. It, too, decided not to file charges, concluding that the district attorney’s office decision was reasonable.

Controversy did not end there. A repeated request by the Los Angeles County Grand Jury that the attorney general’s office provide it with a lawyer to investigate the rape allegation was denied. Subsequently, a key grand juror complained publicly that the district attorney’s office was obstructing justice by lobbying to prevent the appointment of an independent counsel. He was then threatened with contempt of court by a judge and resigned in protest.

Mitchelson has denied the sexual assault accusations.

The State Bar’s case against Mitchelson alleged that he:

- Charged an unconscionable fee of $25,000 to Revson in 1986 to obtain a divorce for her in New York, where he was not a member of the Bar. Without obtaining Revson’s consent, he arranged for a New York law firm to assist him. When Revson fired him, she had to hire yet another lawyer to get her money back, a process that took more than a year. Mitchelson allegedly refused to give the money back until Revson promised to tell the California State Bar that she wanted to withdraw her complaint against him.

- Made a false promise to Newmar by telling her in 1984 that he would personally handle her divorce case and then delegated it to an associate. Mitchelson was said to have charged an advance fee of $5,000 and when Newmar fired him, he failed to return $2,800 that he had not earned. He allegedly kept the money for 15 months until she complained to the State Bar and the Bar contacted Mitchelson.

- Failed to perform work he had promised for Mary Stratton of San Dimas, who retained him in 1985 to obtain a legal separation from her husband and a restraining order to prevent him from dissipating community assets. Mitchelson filed a petition for separation four months after he was retained but did not tell his client he had done it. When she fired him, he still had not filed for a restraining order although he had promised to do it immediately. Stratton paid Mitchelson $15,000; when she requested a refund, it took her 18 months of negotiations to obtain $10,000.

- Failed to promptly return the unearned portion of a $10,000 retainer to Joan Hall, who hired Mitchelson to obtain a divorce in 1985 when she was living in San Diego. She fired him a few days later, but he allegedly refused to provide an accounting of how he had earned the retainer and refused to provide unearned fees. Two years later he returned $4,500.

State Bar chief trial counsel James A. Bascue said: “We have in excess of 20 complaints against Mr. Mitchelson. The remaining complaints are under investigation.”

Dramatic Flair

Mitchelson, 60, is as well-known for his dramatic flair and courtship of the media as for his legal victories. He has had a string of high publicity cases for years and has made himself easily accessible to the media--once even agreeing to be filmed for television peeking above his bubble-filled spa.

His first high publicity case came in 1964 when he handled the divorce of Pamela Mason from actor James Mason. He once told an interviewer that good word-of-mouth from Pamela Mason led to his getting many other celebrity clients.

The most famous of his court victories came in 1976 when the California Supreme Court ruled that live-in lovers could legally seek to share in a partner’s property when they separated. The ruling came in the case of Michelle Triola Marvin, a singer who abandoned her career to be actor Lee Marvin’s live-in companion. Legal authorities braced for a flood of such suits, but they never came.