Justia Legal Ethics Opinion Summaries

James Kelly, as trustee of the Beverly Snodgrass Clark Inter Vivos 1999 Separate Property Trust, sued Barbara J. Orr, Joseph Holland, Gretchen Shaffer, and DLA Piper LLP (US) (Defendants) for professional negligence in relation to legal advice they provided to his predecessor trustee of the Trust. Defendants demurred on statute of limitations grounds, arguing his action was barred by the one-year statute of limitations under Code of Civil Procedure section 340.6. The trial court sustained Defendants' demurrer without leave to amend, and Kelly filed a timely notice of appeal. On review of the matter, the Court of Appeal concluded the statute of limitations was tolled under section 340.6, subdivision (a)(2), until March 22, 2013, the date Kelly alleged Defendants ceased representation of Kelly's predecessor trustee. Because Kelly filed suit on February 27, 2014, less than one year after Defendants ceased representation of the predecessor trustee, the Court of Appeal concluded Kelly's action was not time-barred. The Court reversed the judgment and remanded for further proceedings. View "Kelly v. Orr" on Justia Law

The last will and testament of Donald Amundson provided for his entire estate to be distributed to the Donald G. Amundson Trust. The Trust owned farmland jointly with the Kenneth Amundson Trust, which was set up by Donald Amundson's brother. Donald Amundson's Trust declaration directed the Trust assets were to be distributed upon his death to four charities, with the remainder distributed to ten nieces and nephews. Debra Magers and Gladys Gleason were initially appointed as co-personal representatives of the Estate. Magers, Gleason, and Todd Graveline were appointed as co-trustees of the Trust. John Widdel, Jr. represented all parties in relation to the administration of the estate. Magers eventually became sole personal representative and trustee of the Trust and Estate. In August 2013, the beneficiaries of the Estate petitioned for court determination of reasonableness of fees and for settlement and distribution of estate. The petition objected to the fees charged by Magers and Widdel for their services to the Estate and Trust. In September 2014, the district court found Magers had breached her fiduciary duty in several ways, which included paying Widdel large fees without question. The court also found administration of the Estate and Trust was not complicated and Widdel's fees were unreasonable in light of the nature of the work performed. The court ordered Widdel to return attorney's fees in the amount of $95,000. Widdel appealed the district court judgment ordering him to repay $95,000 of the attorney's fees he charged in the administration of the Estate. He argued the district court abused its discretion in finding the attorney's fees were unreasonable, and that the district court abused its discretion by not holding an evidentiary hearing on the issue of substituting his professional corporation as the named party on the judgment. The Supreme Court affirmed the judgment of the district court, concluding the district court did not abuse its discretion in finding the fees charged by Widdel were unreasonable and in finding Widdel could properly be held personally liable on the judgment. View "Estate of Amundson" on Justia Law

Attorney William Salzwedel appealed a $96,077.14 judgment surcharging him for excessive attorney's/trustee's fees, medical expert fees, and costs incurred while acting as the temporary trustee of the Moore Family Trust. The court concluded that substantial evidence supports the finding that the fees were unreasonable, and Salzwedel's trust accounting demonstrates that the fees and expenses were excessive. The court found that Salzwedel was repeatedly warned that he had a conflict of interest acting as trustee and as the attorney for a mentally impaired client in a conservatorship proceeding. He had never served as a trustee or been involved in a conservatorship before but perceived it as a license to zealously fight for Moore no matter what the cost. The court denied Salzwedel's remaining claims and affirmed the judgment. View "Friend v. Salzwedel" on Justia Law

Plaintiffs filed a pro se complaint on behalf of two estates, claiming that financial institutions fraudulently transferred real estate in Shelby County, Tennessee, and failed to follow proper procedures for selling properties encumbered by outstanding liens. The district court dismissed on the ground that a non-attorney cannot appear in court on behalf of an artificial entity such as an estate, even though plaintiffs claimed that they were the sole beneficiaries of their respective estates. Each signed the notice of appeal as the “Authorized Representative” of the estates. Federal law allows parties to “plead and conduct their own cases personally or by counsel,” 28 U.S.C. 1654. The Sixth Circuit denied a motion to dismiss the appeal, holding that the sole beneficiary of an estate without creditors may represent the estate pro se. The purpose of protecting third parties is not implicated when the only person affected by a nonattorney’s representation is the nonattorney herself. The tradition that “a corporation can only appear by attorney,” has not been extended to estates. View "Bass v. Leatherwood" on Justia Law

John McConnell created a trust naming his three children - James McConnell, Kathleen Hewitt, and Amy Sheridan - as beneficiaries. A decade later, Hewitt filed an application for, inter alia, a trust accounting and removal of a trustee. Plaintiffs in error represented Hewitt during the proceedings on the application. The probate court approved a stipulated agreement authorizing certain distributions to Hewitt and Sheridan from the trust. McConnell appealed, claiming that he did not receive notice of the probate proceedings and would not have consented to the terms of the stipulated agreement if he had had the opportunity to participate. The trial court issued an order to show cause why McConnell’s appeal should not be sustained and the probate court’s order vacated. The court ordered the Plaintiffs in error to appear at the hearing on the order to show cause. The plaintiffs in error appeared at the hearing and testified about their involvement in the proceedings before the probate court. Thereafter, the plaintiffs in error filed this writ of error challenging the trial court’s authority to order that they appear in court. The Supreme Court dismissed the writ of error, holding that the trial court’s order was not a final judgment from which a writ of error may be brought. View "McConnell v. McConnell" on Justia Law

Paul retained attorney Patton to draft an amendment to his revocable living trust. Paul signed the “Trust Amendment,” which, as drafted by Patton, named his wife, Helen, and his children, Stephen, David, Alan, and Nancy, as beneficiaries. Stephen and David also are the successor trustees. Following Paul’s death, they petitioned the probate court to modify the Trust Amendment, alleging it failed to conform to Paul’s intentions by erroneously granting Helen an interest in brokerage accounts and personal and real property. In that probate court action, Patton admitted the Trust Amendment did not reflect Paul’s intention that his brokerage accounts and personal and real property be divided among his children. Stephen and David settled the probate court action with Helen. The children filed the legal malpractice action, alleging that Patton failed to exercise reasonable care in performing legal services by failing to draft the Trust Amendment in a manner consistent with the decedent’s intentions. The trial court dismissed. The court of appeal reversed. The trial court erred in concluding as a matter of law that the children could not establish Patton owed them a duty as beneficiaries; they should be permitted to amend their complaint to allege such a duty. View "Paul v. Patton" on Justia Law

Bell sued attorney Ruben and his firm, alleging that they negligently and fraudulently mismanaged her trust, causing a loss of $34 million. Before arbitration, Ruben filed for Chapter 7 bankruptcy. Bell filed an adversary complaint opposing discharge of Ruben’s fraud-based debt to her, 11 U.S.C. 523(a)(2)(A), (4). The bankruptcy judge granted Ruben a discharge of his other debts, but not of that fraud debt. Ruben’s liability insurance did not cover fraud. Bell settled her negligence claims against Ruben and all claims against the other defendants in arbitration. The arbitration panel ruled, with respect to the fraud claim, that “damages proven to be attributable to the actions of [Ruben] have been compensated,” but ordered Ruben to pay administrative fees and expenses of the American Arbitration Association (AAA) totaling $21,200.00 and that compensation and expenses of the arbitrators, advanced by Bell, totaling $150,304.54 would be borne by Ruben. AAA rules, which governed the arbitration, provide that expenses of arbitration “shall be borne equally” unless the parties agree otherwise or the arbitrator assesses expenses against specified parties. Ruben refused to pay. The bankruptcy judge entered summary judgment in favor of Ruben. The district court reversed, in favor of Bell. The Seventh Circuit affirmed. View "Ruben v. Bell" on Justia Law

Edmonds was admitted to the Illinois bar in 1975. He became a member of St. Mark Church. In1998, Sloan asked Edmonds to rewrite Sloan’s will to benefit St. Mark’s. Edmonds knew Hannah, a lawyer who, in 1992, was suspended for neglecting and misrepresenting client matters, failing to maintain a client trust account, and commingling. In 1994, Hannah was suspended until further order; he never sought reinstatement. Edmonds was unaware of Hannah’s disciplinary status and believed that Hannah was an estate planning expert. Edmonds introduced Hannah to Sloan, who transferred some assets to American Express for Hannah’s management. Sloan’s trust held $3.36 million at one point. Sloan died in 2000. Edmonds acted as executor and trustee. At his direction, the trust and estate bought Range Energy stock recommended by Hannah. Hannah eventually became president and CEO of Range, which, by 2001, held all of Sloan’s personal assets and most of the trust assets. In 2003, the British Columbia Securities Commission suspended trading of Range stock, which ultimately became worthless. Edmonds did not inform St. Mark’s about the situation. The church eventually filed suit. In 2009, the successor trustee closed the trust with a balance of $1,149. The ARDC Hearing Board found that Edmonds breached fiduciary duties, engaged in dishonest conduct, neglected an estate matter associated with the trust, and commingled his funds with client or third-party funds. The Review Board reversed the findings of breach of fiduciary duty and dishonest conduct and recommended that Edmonds be suspended for 60 days. The Illinois Supreme Court imposed a three-month suspension. View "In re Edmonds" on Justia Law

Appellant Erika Fabian brought this action for legal malpractice and breach of contract by a third-party beneficiary, alleging respondents attorney Ross M. Lindsay, III and his law firm Lindsay & Lindsay made a drafting error in preparing a trust instrument for her late uncle and, as a result, she was effectively disinherited. Appellant appealed the circuit court order dismissing her action under Rule 12(b)(6), SCRCP for failing to state a claim and contended South Carolina should recognize a cause of action, in tort and in contract, by a third-party beneficiary of a will or estate planning document against a lawyer whose drafting error defeats or diminishes the client's intent. Upon review of the matter, the Supreme Court agreed, reversed and remanded for further proceedings. View "Fabian v. Lindsay" on Justia Law

In 2002, David hired the Attorneys to represent him in petitioning for his appointment as probate conservator of the person and estate of his mother, Donna. In his petition, David represented there were no conservatorship assets and that all of Donna’s assets were held in her Trust, so that no bond was required. Donna actually owned significant assets, including real property and several individual retirement accounts (IRAs), individually and not as assets of her Trust. The probate court appointed David as conservator of both Donna’s person and estate and waived bond. The Attorneys continued to represent David and allegedly “knew that Donna . . . had assets in her name that under California law were assets of the conservatorship,” but never informed the probate court of their existence nor petitioned the court to require or increase a bond. David subsequently misappropriated over one million dollars. Stine, a subsequently-appointed licensed professional fiduciary sued David for financial elder abuse and conversion and the Attorneys for legal malpractice. The trial court dismissed the Attorneys. The court of appeal reversed holding that the successor trustee is not subject to any defense that can be interposed against David and David’s malfeasance. View "Stine v. Dell'Osso" on Justia Law