Tuesday, July 14, 2009

Gifts From Client Improper But Not Venal

An Illinois hearing board has found that an attorney had breached fiduciary obligations in accepting a series of gifts from a now-deceased client with whom she had developed a close friendship. The hearing board, however, rejected the Administrator's proposed one-year suspension and recommended a reprimand. The board's key findings show that it did not agree that the misconduct was as ill-motivated as the Administrator had argued:

In this case we find the evidence established that Respondent did not take advantage of Mary [the client] or induce her to provide the checks at issue to Respondent. Respondent was a credible witness and her testimony clearly demonstrated that there was a close friendship between her and Mary which was corroborated by the testimony of Respondent’s mother and Mary’s caregiver, Ms. Nurse. Respondent testified in detail about the circumstances surrounding each gift and the reasons why Mary was insistent upon helping Respondent financially. Additionally, the testimony demonstrated that Mary was an intelligent, highly educated woman who was self-aware, engaged with other people and who actively participated in decisions concerning her health and her personal estate.

The fact that Respondent did not try to isolate Mary when she was diagnosed with a terminal illness also rebuts the presumption of undue influence. The phone records show that Respondent called Mary’s relatives when Mary returned home from the hospital to start hospice. The evidence further established that Respondent told Mary’s relatives that Mary was dying from cancer and urged them to be with Mary in the final days of her life.

Additionally, although there was substantial medical evidence presented which showed Mary suffered from common diseases of advancing age, there was no testimony that connected her health or moments of temporary confusion to her incapacity to express her desires on any of the dates Respondent received the checks from her. Dr. Littman did not offer any medical opinion in his testimony regarding Mary’s capacity or mental ability and declined to express an opinion on these subjects. Ms. Nurse testified about her observations that Mary was alert, talkative and in her usual state of humor during the first few days after she came home from the hospital. Respondent’s mother and Mary’s cousins also testified that they were able to converse with Mary and that she maintained her wit during this time period.

We note that there were no independent witnesses to the gifts Mary gave Respondent and that in Schuyler, 91 Ill. 2d at 17, the Court stated that "a totally private transaction, inadequately documented, clearly fails to rebut the presumption of undue influence which arises when the attorney benefits during the attorney-client relationship." However, we find the transactions between Mary and Respondent are clearly distinguishable from those between the attorney and client in Schuyler. The attorney in Schuyler received money from an elderly client who was living in a retirement home, but there was no evidence of a personal relationship between the attorney and the client. There was also evidence that after the client died the attorney in Schuyler was not candid with representatives of the client’s estate who were trying to locate the funds the attorney had received from the client.

The uncontradicted testimony and evidence in this case showed that Respondent was a relatively young woman who was befriended by an older woman and that Respondent and Mary had a close and mutually supportive relationship. This does not excuse Respondent’s misconduct, but it does rebut the presumption of undue influence.

There was also no evidence Respondent tried to hide the gifts she received from Mary. Respondent was candid with her mother about all the checks she received from Mary when Sandra asked her about the $40,000 check to the U.S. Department of Education. The Administrator’s argument that Respondent made the $40,000 check out to U.S. Department of Education to hide the fact that it was a gift to Respondent was not convincing because Respondent’s social security number was on the check which clearly designated her as the beneficiary of the money. Additionally, once Sandra informed Respondent she should not have accepted the checks from Mary the money was immediately repaid to Mary’s estate and the reimbursement was disclosed to Mary’s half brother and his wife.

Finally, the Administrator’s argument that Respondent was not candid about whether she was a signatory on the account the $10,000 check made payable to Orlando Williams was drawn on was not persuasive. Respondent testified that she could not remember whether she was a signatory on the account before or after Mary’s death and the Administrator failed to present any definitive evidence regarding whether or not Respondent was a signatory on the account at the time she signed the check. Therefore, we can not conclude Respondent was not candid in her testimony.

A few additional interesting facts. Respondent has repaid the gifts to Mary's estate. Respondent's mother (who is referred to in findings of fact above) is an attorney. Respondent was for a time an attorney employed in her mother's law office. The name of the attending nurse who testified in the trial was Thora Nurse. (Mike Frisch)



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