O.C. Lawyer’s Handling of Estate Investigated : Courts: State Bar examining possible misconduct and financial abuse in Anaheim widow’s $24-million trust.

IRVINE — The State Bar of California is investigating whether a prominent Irvine lawyer took unfair advantage of an 86-year-old Anaheim widow to gain exclusive control of her $24-million estate as well as a bountiful source of questionable fees for himself and his family members.

Under scrutiny in one of the most contested cases in Orange County probate court is Lloyd G. Copenbarger, 51, perhaps best known statewide among evangelical churches for offering financial seminars by an “experienced Christian estate planning attorney,” as he is described in promotional literature.

Court records and official documents reveal that the State Bar’s two-year investigation, which could ultimately cost Copenbarger his license to practice law, includes allegations that he violated the legal profession’s code of conduct while handling the Hazel I. Maag estate.

Though Copenbarger acknowledges being the target of such an investigation, he dismisses the allegations against him as “without foundation,” “despicable in nature” or “misleading garbage.”

His management of Maag’s assets, which he defends as entirely in line with her wishes, has also been questioned repeatedly since 1989 by her relatives as well as two Orange County Superior Court judges and two court-appointed attorneys who have looked into his handling of Maag’s estate.

Copenbarger and his attorneys argue that many, if not all, of those questioning his actions are motivated by self-interest.

“Anyone can make an allegation. All you need is a personal computer and a pen,” said attorney Paul Copenbarger, who was hired and paid with estate funds to defend his older brother’s right to retain control of the estate. “In this case, court pleadings are being used as a platform to launch attacks with impunity.”

Despite Lloyd Copenbarger’s declarations of innocence, the Maag case raised so many questions in the mind of Superior Court Judge Tully H. Seymour that Seymour continued to engage a lawyer even after Maag’s death in May, 1992, to ascertain whether the woman’s estate was being run properly. The judge also asked the state attorney general’s office to review the case.

After receiving more than 1,500 pages of legal records from Lloyd Copenbarger outlining his defense, the state attorney general has indicated it will not become involved at this time. However, the State Bar has continued to press an investigation that has been underway for two years, which State Bar officials say in general is not uncommon for complicated cases.

Because of secrecy rules, bar association officials have declined to comment. Yet probate court records have confirmed that they are looking into specific complaints that Copenbarger hired his own relatives at estate expense, misused client funds, billed the estate exorbitant amounts of money for fees and expenses and made decisions that went against the best interests of his client.

Lawyer’s Power

One important issue is whether Maag, the descendant of Orange County pioneers and one of the area’s last citrus growers, was mentally capable of understanding what she was doing when she entrusted Copenbarger with enormous power over her assets only a few weeks after meeting him in late 1986.

That year, Maag was by all accounts a frugal and irascible widow who lived alone on a 23-acre citrus ranch off North Solomon Drive in Anaheim. It was one of two ranches in the county she had run on her own over the years. Though she liked to refer to herself as “just a farmer,” she had built up a $24-million estate that included stocks, commercial buildings and vacant land.

Her closest relatives at the time were nieces Barbara Bell and Hazel Rosenbaum, both of Orange County, and their 10 children. Despite occasional feuds with their aunt, family members say that most of them either kept in touch or visited her until the estate became embroiled in controversy in late 1989.

In 1964, Maag had signed a will that bequeathed half of her estate in equal shares to Bell and Rosenbaum, a quarter to the Tumor Clinic of the California Hospital in Los Angeles, and the remainder to relatives who, it turns out, she outlived. A few thousand dollars were to go to a church and a social club.

That will remained in force for more than 22 years until Copenbarger was introduced to her in November, 1986, by a real estate agent who had an agreement to split commissions with Copenbarger on land sold from at least one estate the lawyer handled.

Once he had been retained as her attorney, Copenbarger helped Maag create a living trust and execute documents that by January, 1987, gave him power of attorney over her affairs and gave him exclusive control over her trust if she became incapacitated.

Virtually all of her estate was earmarked for the Hazel I. Maag Foundation, which Copenbarger would direct, paying himself “reasonable compensation without” court oversight for its administration. In contrast to the 1964 will, which would have bequeathed her nieces at least $10 million, the redrawn instrument eventually left about $650,000 for them to share.

Hearing Voices

According to court records, six people have said in sworn statements that Maag had difficulty conducting her personal affairs--even understanding a simple bank transaction--when Copenbarger became her attorney. Five people have said in court depositions that the estate plan to leave her assets to a charitable foundation, with no designated beneficiaries, is hard to reconcile with her past decision to leave the bulk of her estate to relatives.

“Copenbarger doesn’t deserve it,” said Laura Fox, Maag’s grandniece, whose mother received half of a tax-paid, $2.6-million settlement, with another $600,000 going for their attorneys’ fees. “The estate is worth more than $20 million now, but it’s not the money. Every time I drive by her ranch, I know I can’t walk through it anymore.”

Even before she was introduced to Copenbarger in the mid-1980s, relatives and acquaintances said, Maag claimed to hear the voices of dead acquaintances, accused people of doing things they never did, threw away her bills, could not read well and had bouts of confusion. Because she refused to have her plumbing fixed at the ranch, they said, she went to the bathroom in a bucket, which she emptied in one of her orange groves.

“She was not clear in thought, and couldn’t always recognize her own relatives,” Pegi A. Black, a grandniece and a nurse-practitioner who specializes in geriatrics, told The Times. “I don’t believe she could understand legal matters. I mean she was alert, but she couldn’t remember what banks she kept her money at and what accounts she had.”

On June 26, 1986, almost five months before she met Copenbarger, Maag was admitted to St. Joseph Hospital in Orange after falling into an irrigation ditch on her ranch. Doctors at the hospital found she was suffering from “acute organic brain syndrome,” a condition that produces hallucinations, delirium, confusion and some cerebral atrophy, an irreversible shrinking of the brain.

Her memory was so poor on the day of admission that she could not remember three objects that had just been shown to her. Hospital records state: “She thinks that President Roosevelt is the President.”

Questions about her mental competency persisted at least until the late summer of 1988. From July to August, PRN Inc., an Anaheim nursing service, provided 24-hour care to Maag at her ranch. According to the company, PRN nurses found that Maag’s memory was poor and that she did not appear to be mentally sound.

The nurses also thought it odd that her ranch house was filthy and that Copenbarger would come by on occasion to fix Maag breakfast, said a PRN employee, who requested anonymity.

Because of Maag’s failing health and mental condition, lawyer Michael D. Pursell, who was appointed by a Superior Court judge to represent her interests, argued in court documents that Maag might have been particularly vulnerable to Copenbarger’s influence.

According to official documents and interviews with family members, Maag reportedly told a relative that Copenbarger once locked her in his law office for hours until she relented and signed legal papers she did not understand.

And, in a tape-recorded conversation between Maag and Copenbarger that came to light during probate court proceedings, Maag is heard telling him: “I can’t read. Don’t ask me to read, ‘cause I can’t see a thing. I’m going totally blind. I guess that’s the way you like me--blind.”

As Copenbarger consolidated his control over Maag’s assets, family members said, it became increasingly difficult for them to visit or talk with their aunt privately because caretakers hired by the attorney were invariably lurking nearby, apparently to eavesdrop on them.

Copenbarger denies any impropriety, saying that Maag knew what she owned and fully understood the estate plans he prepared, hence fulfilling the legal requirements for mental competency. He recalled that there were various disputes in the family and that Maag clearly wanted to change her will so that most of her estate would go to charity.

“I did everything in my power to heal the (family) problems that existed,” Copenbarger said. “I encouraged Hazel to increase the provisions she was making (in her will) to her relatives and I encouraged (her relatives) to expand their contacts with their aunt.”

He cited the sworn statements of at least six of Maag’s acquaintances, relatives and associates who said they thought Maag was mentally sound. Two of those people told The Times they were not qualified to judge her mental condition at the time and regret having signed those statements.

The attorney also points to the court deposition of Maag’s leasing agent, who said she could understand a basic rental agreement for one of her buildings. Yet in the same deposition, the agent, William S. Frantz, said he considered her “irrational” for rejecting a better lease for one property, and incapable of understanding other matters regarding her real estate.

Copenbarger insists, however, that “there was nothing about Hazel Maag’s demeanor that would differentiate her from” anyone else.

As for the suggestion that she was out of touch with reality when admitted to St. Joseph in 1986, the attorney said that Maag was shaken up, hence she was not as sharp mentally as she could be. No one objected, not even the social workers, when she was released to go, he pointed out.

Copenbarger described Maag as strong-willed, and a “curmudgeon who did not suffer fools lightly.” She was probably being flip with the hospital staff when she told them Roosevelt was President, he said.

Medical records from St. Joseph show that Maag “markedly improved,” became more alert and talkative, and could better remember people and where she was. By the time of her discharge six weeks after admission, mental problems were no longer noted, according to the records.

Recorded Talks

Copenbarger said he began recording his conversations with Maag in 1987 because he believed her relatives were going to raise the issue of mental competency in court and he wanted to protect himself. The part where she talks about being blind, he said, has been taken out of context.

“She was pretty unhappy” at the moment, he said. “People in the area were putting trash on her property and going on her property to steal her oranges. She was ventilating her frustrations. . . . I have no idea what she meant. She was annoyed because she was getting old. . . . She railed at death.”

The question of Maag’s mental competency became a legitimate concern in 1989, he said, because of several medical crises, including a stroke in May of that year that incapacitated her.

At the time, Copenbarger was to have become Maag’s conservator, or legal guardian, under her estate agreements. But niece Bell filed a court action, urging that someone other than him be appointed as her legal guardian or conservator. Her court action did not seek any financial considerations for herself, nor did it ask that the will be rewritten to increase the family’s inheritance.

Within two months, the attorney fired back with a lawsuit against Bell, contending that she and other relatives were trying to thwart Maag’s wishes and recoup their share of the estate designated under the 1964 will. He alleged that the revised will was valid and that Maag was legally competent when she signed her estate documents.

During the ensuing court fight, Superior Court Judge James A. Jackman appointed lawyer Seymour S. Pizer, now deceased, as a special master in August, 1989, to review the situation and help the court decide whether an independent conservator should be appointed for Maag’s estate.

After interviewing more than a dozen people, including Maag’s relatives and Copenbarger, Pizer recommended on Jan. 23, 1990, that someone other than Copenbarger “would be in the best position to protect the interest of Mrs. Maag without the inference of any self-dealing or interest in the estate.”

Pizer said that Copenbarger had gained broad, unsupervised control over Maag’s affairs, for which he was drawing fees, and there was evidence that Copenbarger planned to split real estate commissions on the sale of Maag’s property, something that Copenbarger subsequently acknowledged in a sworn deposition. Pizer noted, too, that Copenbarger had hired relatives to provide legal counsel as well as to supervise Maag’s health care and ranch operations.

For his lawsuit against Bell, Copenbarger employed his younger brother, Paul, as an attorney who was paid by the estate. Lloyd Copenbarger’s son, Larry, and daughter-in-law, Judi, both law students, were hired to watch over Maag and her ranch. Neither was experienced at citrus ranching or nursing.

Although Pizer noted that Maag’s physical care was excellent, he warned that “there are potential and actual conflicts of interest.”

As Pizer had recommended, the court in February, 1990, appointed a conservator for Maag, Lura O. Scoville. Eight months later, then-presiding Superior Court Judge James L. Smith named Pursell to act as an independent attorney for Maag.

“People were asking why was (Copenbarger) wearing all these hats,” said Ernest Hayward, an attorney for Scoville.

Max Gutierrez, a San Francisco lawyer who is vice chairman of the American Bar Assn. probate and trust law section, said the association’s guidelines do not prohibit an attorney from becoming the trustee, even if he is the author of the trust documents.

But he said most attorneys avoid being named as trustees of their clients’ trusts because “they want to avoid actual conflicts of interests, they want to avoid situations that gave the appearance of irregular activity, and they don’t want to put themselves in a position where it doesn’t look good to a third party.”

“Most attorneys either do not accept appointments as trustees or do so only when there is no real alternative available to the client,” Gutierrez said.

Hayward said that Copenbarger left himself open for criticism because his relatives went to work for the estate and he would not disclose the charities that would receive funds from the Hazel I. Maag Foundation.

“I could never get from him a list of charities that would benefit so we were left to suppose. My supposition was that it would fund religious organizations and schools that were associated with Mr. Copenbarger,” Hayward said. “The only nexus Hazel Maag had with any religion was to the Quakers and the Methodist Church. She had nothing to do with fundamentalist and evangelical Christian causes” that Copenbarger is associated with.

Copenbarger’s promotional brochures state that he has held scores of seminars for numerous religious institutions, such as the Rev. Robert H. Schuller’s Crystal Cathedral, Campus Crusade for Christ, the Assemblies of God and the Billy Graham Evangelical Assn.

Copenbarger said there was nothing wrong with his reluctance to name the charities that will benefit from the Maag foundation, adding that he will make such decisions on the basis of Maag’s wishes. But “the time is not yet ripe to make that decision,” he told The Times.

Suit Settlement

In December, 1991, he agreed to settle the lawsuit with Maag’s nieces, Bell and Rosenbaum, who had joined Bell in defending the suit. They accepted $1.3 million each and the promise that Copenbarger would pay any taxes due, and their legal fees of $600,000.

Copenbarger characterized the settlement as fortuitous for the estate, considering that it represented roughly 10% of the estate’s value at the time. Because of a court agreement to keep silent, the Bell and Rosenbaum families declined to discuss why they settled the case.

On May 6, 1992, two days after Maag’s death, Pursell, the court-appointed attorney, filed a report raising another round of questions about Copenbarger that were similar to those of Pizer, the special master.

Pursell noted potential conflicts of interest and Copenbarger’s relatives working for the estate. Although Copenbarger was never removed as trustee of Maag’s estate, Pursell stated in court documents that there was “ample evidence” of wrongdoing to warrant a thorough investigation and to remove him from that role.

Of particular significance, Pursell questioned as exorbitant, unjustified and perhaps illegal, hundreds of hours of the trustee and attorney fees paid out by the estate to Copenbarger and his relatives from 1989 to 1991. Hundreds of thousands of dollars in expenditures for Maag’s properties were questioned as well in the attorney’s court documents.

Pursell also mentioned two promissory notes Copenbarger had issued on behalf of the estate, one showing that Copenbarger was owed $600,000 and another showing that $1.35 million was owed to a real estate developer who had apparently advanced that sum to the estate so that the settlements could be paid to Bell and Rosenbaum, the nieces.

Pursell said he could find no justification for the estate’s indebtedness to either Copenbarger or the real estate developer.

Copenbarger declared that Pursell simply did not understand how he been forced to raise money for the settlement, and that he and the developer had loaned money to the estate, which was property-rich but cash-poor. Dates of those transactions coincide with settlement talks, court records show.

There are logical explanations and documentation for everything, Copenbarger has argued in detailed court records and during six hours of interviews with The Times in which his brother, Paul, and two other attorneys representing Copenbarger took part.

First of all, Copenbarger told The Times, he had good reasons and permission from Maag in her trust documents to secure the loans and make the expenditures that have been called into question.

As far as expenditures and trustee fees are concerned, Copenbarger said that Maag’s estate was particularly time-consuming for him because it contained a lot of property, some of it in need of repair or remodeling, such as Maag’s ranch house.

“It should be noted,” Copenbarger stated in court records, “that despite the intense scrutiny to which these statements have been subjected by several examiners, very few errors have been found. Of the errors identified, the majority both in number and dollar amount were errors in favor of Mrs. Maag. . . .”

Pursell, Copenbarger claims, is simply acting out of self-interest, stirring the pot with groundless allegations so he can bill the court for tens of thousands of dollars in legal fees. He added that the court-appointed attorney never came to his office to fully review the documentation for estate expenditures.

‘Controls Fell Apart’

Although the State Bar still has an open investigation, much of the mechanism set up in probate court to oversee Maag’s estate is winding down, reducing the possibility of determining what happened.

Seymour, the probate judge who kept the case alive, has been transferred to new duties in the normal rotation of courthouse assignments. Maag is dead, leaving Pursell without a client and making it unlikely that his services will be needed in the future.

The state attorney general’s unit that oversees charitable trusts has indicated it will not get involved in the dispute. And, the lawsuit Copenbarger brought against Maag’s relatives has been resolved without trial.

“The controls fell apart with the settlement, and Maag’s death,” said Hayward, the attorney who worked for Scoville, the independent conservator. “Without Maag and the relatives, the court will have a hard time justifying its continued scrutiny of the estate. If there is any wrongdoing, it will be left up to the State Bar to find.”

But Copenbarger says that the only thing he is willing to admit to the State Bar association is that he did not keep the workings of the estate confidential. “Maag didn’t want her affairs public,” he said. “Because of all this litigation, that is the only thing I have failed her on as her attorney.”