Posts Tagged ‘suspension’

Lawyer Suspended After Representing Wife as Conservator

JUNE 13, 2011 VOLUME 18 NUMBER 21
Richard J. Murphy was first admitted to practice law in 1964. He was a fixture in local political and legal circles in Osceola, Iowa, for nearly fifty years. He was the attorney for the City of Osceola, and he had been the County Attorney years earlier. His private practice, which he shared with his son, focused on real estate, probate and tax issues.

Helen Doss had been the County Auditor at the same time Mr. Murphy was County Attorney, and their friendship continued after they both left office. Ms. Doss, who had no children, came to rely on Mr. Murphy and his wife for assistance with errands and legal matters. Mr. Murphy prepared her will, which named his wife as executor. He helped her set up bank accounts, including one that named Mrs. Murphy as co-owner. He was named as one of the beneficiaries of her life insurance policy.

When Ms. Doss, at 92, experienced several falls in her home, Mr. Murphy filed a voluntary guardianship and conservatorship petition. Ms. Doss acknowledged that she needed help, and agreed that Mrs. Murphy should be appointed as her guardian and conservator.

For the next four years, Mr. Murphy and his wife took care of Ms. Doss and her finances. He arranged to cash in over $125,000 worth of Series E Bonds, and placed the proceeds in an account jointly held between Ms. Doss and Mrs. Murphy. He arranged the sale of her home and represented his wife at the closing; his son represented the buyers in the transaction. He prepared a new will, naming Mrs. Murphy as executor again.

During the conservatorship, Mr. Murphy prepared annual accountings for his wife to sign and file with the local court. He left off at least one account, one which he said he considered to be Ms. Doss’ own account and not part of the conservatorship. That account named Mrs. Murphy as co-owner, and Mrs. Murphy wrote various checks on it during the conservatorship years — including at least one, for $1,427.96 for a new vacuum cleaner for herself. Other checks on the undisclosed account were for $500 or $1,000 and payable to either Mrs. Murphy or to Mr. Murphy himself.

When Ms. Doss died in 2004, Mr. Murphy represented his wife in filing and administering the probate proceedings. Her will (which he had prepared) left the bulk of her estate to nephews and nieces. However, considering the joint accounts and life insurance proceeds, almost a third of Ms. Doss’ estate went to Mr. and Mrs. Murphy rather than the relatives.

One of the nephews complained, and after negotiations a portion of Ms. Doss’ estate was returned for distribution to family. But the matter did not end there. The Disciplinary Board of the Iowa Supreme Court, which regulates lawyers, got involved.

The Disciplinary Board conducted hearings and ultimately recommended a public reprimand for Mr. Murphy’s multiple violations of legal ethics rules. Mr. Murphy appealed, and the matter was considered again — this time by the Iowa Supreme Court.

In its ruling last month, the Court decided that public reprimand was not the right sanction. Instead, Mr. Murphy was suspended from the practice of law indefinitely, with no ability to reapply for admission for at least eighteen months.

After the fact, violations like Mr. Murphy’s always seem obvious. It is hard to imagine what he thought was defensible about filing a petition against his own client (even with her consent), and then representing the guardian and conservator. It seems even more obviously wrong when the guardian and conservator is his own wife. Add to that the transactions giving an increasing share of Ms. Doss’ estate to his wife, his failure to include all of Ms. Doss’ assets in the conservatorship accountings, and then the multiple representations in the sale of her home.

What was Mr. Murphy’s explanation for his actions? The Iowa Supreme Court characterizes his response as arguing that he was just following Ms. Doss’ instructions. She was strong-willed and had a generous nature, he argued. He denied that he had influenced her in any way in the exercise of her generosity. Supreme Court Attorney Disciplinary Board v. Murphy, May 27, 2011.

Lawyer Suspended After Filing Guardianship Petition on Client

JUNE 22, 2009  VOLUME 16, NUMBER 45

A lawyer’s job is, of course, to help his or her client to accomplish the client’s goals. Sometimes, though, the client’s capacity may be diminished, and particularly in the elder law practice. What should the lawyer do when the client seems to be vulnerable to financial exploitation, or physical or emotional abuse? How far may the lawyer go to protect the client? When does the lawyer have a duty to take action?

The rules of ethics governing lawyers actually address the question. The American Bar Association has developed “Model Rules of Professional Responsibility,” which have been adopted (in some form) in nearly every state. One of those Model Rules, Rule 1.14, addresses how to deal with a client with diminished capacity. The central principle: a lawyer should strive to “maintain a normal client-lawyer relationship” with the client, despite the diminished capacity. The Rule specifically recognizes that sometimes it can even be necessary for the lawyer to initiate some sort of protective action — possibly including a guardianship or conservatorship proceeding.

Stephen Eugster, a Spokane, Washington, lawyer, thought he faced that question. An elderly widow had consulted him about the estate plan she and her husband had set up before the husband’s death. Although the plan gave considerable control to her son, the widow no longer trusted the son to handle her finances. She wanted to remove him as her agent and trustee, and try to make him return assets she thought had improperly been transferred into his control.

Mr. Eugster prepared new documents naming himself as agent and trustee, and had his client sign them. Then he approached the son about getting further information and transfer of assets. As it happened, the son was also a former client of Mr. Eugster’s.

After a brief inquiry Mr. Eugster decided that his client’s son was acting properly. He wrote to his client, suggesting that she should be willing to trust her son and let him once again take responsibility for all her finances. She responded by seeking advice from a different lawyer, and her new attorney sent Mr. Eugster a letter dismissing him and revoking his authority under powers of attorney and the trust.

That apparently set off Mr. Eugster’s alarm bells. He was convinced, he said later, that his client must not have been competent, and that the new lawyer and her new trustee must have exercised undue influence over her. Without consulting or even visiting her, he filed a petition seeking appointment of her son as her guardian.

Several months, one professional mental evaluation and $13,500 later, the client conclusively established that she was competent and acting on her own initiative. The guardianship petition was dismissed. The client, however, complained to the Washington State Bar Association.

After a lengthy investigation and hearing process the Disciplinary Board of the Bar recommended that Mr. Eugster should be disbarred. The Washington Supreme Court, in a 5-4 vote, softened the punishment to an 18-month suspension and an order that he repay the legal fees his former client incurred to defend the guardianship. Disciplinary Proceeding Against Eugster, June 11, 2009.

Mr. Eugster had argued that Rule 1.14 recognized that he might have an obligation to actually file the guardianship petition, and that he truly believed that his client was at risk. The Disciplinary Board pointed out that Mr. Eugster had not actually made an investigation to determine whether his client’s capacity had slipped since had last seen her several months before, and that in any event his Petition revealed extensive information obtained from his client during the representation. The Court agreed with the Bar that Mr. Eugster had violated his ethical duties in a number of ways, including acting against his client’s interest, seeking a resolution that ran counter to the purpose for which she had retained him, and disclosure of client confidences.

Four Justices dissented from the Supreme Court’s opinion. All four of them would have imposed permanent disbarment rather than the 18-month suspension of Mr. Eugster’s law license.

What might Mr. Eugster have done if he did think he needed to “protect” his client? The ABA’s Rule 1.14 actually provides several suggestions, none of which Mr. Eugster seems to have considered. As part of the Rules, the Bar offers detailed Comments that lawyers can look to when trying to resolve ethical dilemmas. Comment [5] to Rule 1.14 gives some useful guidance to lawyers who may be concerned about a client’s vulnerability. The basic idea behind the comment: a guardianship petition, while permitted, should be the last resort, after consultations with other professionals, family members, state protective services and other individuals or groups. Always the lawyer should keep in mind the client’s wishes, values, best interests and goals .

Ironically, the lawyer who took over Mr. Eugster’s client seems to have reviewed Rule 1.14 and the Comments — and acted accordingly. One of the suggestions made by the Comment is that the lawyer might seek out appropriate professional services and use powers of attorney and other protective arrangements short of court action. The new lawyer’s approach followed those suggestions perfectly: he had the client sign a new trust and powers of attorney, naming a professional fiduciary to manage her affairs. That allowed the client’s interests to be protected without compromising her desire not to extend her son’s authority over her personal or financial affairs.

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