Filed September 2, 2011
In re Leonard Mason
Commission No. 09 CH 15
Synopsis of Review Board Report and Recommendation
Respondent-Appellee Leonard Mason was charged with misconduct related to his preparation of two wills and a series of trust agreements where he was included as a beneficiary for a woman who had been his close friend for decades. Specifically, the complaint alleged that he breached his fiduciary duty to his client; overreached the attorney-client relationship; exerted undue influence upon his client; prepared a will giving himself a substantial gift from his client, in violation of Rule 1.8(c) of the Illinois Rules of Professional Conduct; represented a client when that representation might have been materially limited by his own interests, in violation of Rule 1.7(b); engaged in conduct prejudicial to the administration of justice, in violation of Rule 8.4(a)(5); and engaged in conduct tending to defeat the administration of justice or bring the courts or legal profession into disrepute, in violation of Supreme Court Rule 770.
Respondent admitted most of the factual allegations of the complaint and denied some of them. He denied all of the allegations of misconduct.
The Administrator chose not to pursue the charge that Respondent exerted undue influence over his client. The Hearing Board found that the Administrator sufficiently proved the remaining charges of the complaint, except that Respondent did not overreach the attorney-client relationship and did not engage in conduct prejudicial to the administration of justice. It recommended that Respondent be censured.
The case was before the Review Board on the exceptions of the Administrator, who objected to the Hearing Board's recommended sanction and argued that Respondent should be suspended for three months. Respondent urged the Review Board to uphold the Hearing Board's recommendation.
The Review Board affirmed the Hearing Board's findings of fact and the findings of misconduct. It recommended that Respondent be censured.
BEFORE THE REVIEW BOARD
ILLINOIS ATTORNEY REGISTRATION
|In the Matter of:
Commission No. 09 CH 15
REPORT AND RECOMMENDATION OF THE REVIEW BOARD
This matter arises from a one-count complaint filed by the Administrator-Appellant against Respondent-Appellee, Leonard Mason, alleging that he took advantage of an elderly widow through a series of wills and trusts that he prepared in which he was named as one of her beneficiaries. Specifically, the complaint alleged that he breached his fiduciary duty to his client; overreached the attorney-client relationship; exerted undue influence upon his client; prepared a will giving himself a substantial gift from his client, in violation of Rule 1.8(c) of the Illinois Rules of Professional Conduct; represented a client when that representation might have been materially limited by his own interests, in violation of Rule 1.7(b); engaged in conduct prejudicial to the administration of justice, in violation of Rule 8.4(a)(5); and engaged in conduct tending to defeat the administration of justice or bring the courts or legal profession into disrepute, in violation of Supreme Court Rule 770. Respondent admitted most of the factual allegations of the complaint and denied some of them. He denied all of the allegations of misconduct.
The Hearing Board found that the Administrator proved by clear and convincing evidence that Respondent had prepared wills for Sylvia Margolis leaving himself substantial
gifts, in violation of Rule 1.8(c), engaged in a conflict of interest, in violation of Rule 1.7(b), breached his fiduciary relationship to Sylvia and engaged in conduct tending to defeat the administration of justice and bring the legal profession into disrepute, in violation of Supreme Court Rule 770. Further, it found that Respondent did not take advantage of the relationship for his own gain and therefore, did not overreach his relationship with his client. There was not sufficient proof that Respondent's conduct was prejudicial to the administration of justice, in violation of Rule 8.4(a)(5). While the Administrator chose not to pursue the charge of undue influence, had the Hearing Board been asked to consider that issue, it would have found that there was not sufficient proof of that charge. The Hearing Board recommended that the Respondent be censured.
The case is now before the Review Board on the exceptions of the Administrator, who objects only to the Hearing Board's recommended sanction. He argues that the Respondent should be suspended for three months. The Respondent urges us to uphold the Hearing Board's recommendation.
The facts necessary for our determination are summarized below.
In 1959, Respondent and his wife purchased a condominium in a four-unit building in Skokie, where they lived until 1967. Residing upstairs from the Masons were an older couple, Sylvia and Herman Margolis.
The Margolises had no children and a close relationship developed between the two families. Bruce Mason, the younger of Respondent's two sons, remembered being in the Margolises' home regularly as a young child. Herman would take him on walks, to the park and to the zoo. He and his brother David would stay with the Margolises while their mother ran
errands. The families ate meals and went out for meals together, and Herman and Sylvia were part of Mason birthday and family celebrations.
At the time that Respondent moved into the building, he was a systems accountant at Inland Steel, with a tax practice on the side. He began attending night school at John Marshall in 1964. Herman encouraged him to go to law school, and helped him fill out the forms necessary to obtain benefits under the GI Bill.
When Respondent became a lawyer in 1968, he became the Margolises' lawyer. According to Respondent, he had always prepared their tax returns and continued to do so. He also reviewed leases, contracts, and pension and insurance documents, and prepared joint and mutual wills for Herman and Sylvia. Respondent testified that he never charged the Margolises for any of the work that he performed, because "they were family."
Herman died in 1988. Pursuant to the will that Respondent had prepared, all of the couple's property, which was owned in joint tenancy, passed to Sylvia upon his death.
On October 21, 1993, Sylvia executed a last will and testament and a living trust agreement prepared by Respondent. Respondent was executor of the will, and successor trustee of the trust. The trust provided that after specific bequests totaling $25,000, Respondent and five others would divide the remainder of the estate. If Respondent predeceased Sylvia, his sons would receive his share. Sylvia's signature on both documents was notarized by Respondent, as was her signature on her second will and all the amendments to her living trust agreement.
On September 19, 1996, Sylvia executed the first amendment to her living trust agreement. Those receiving specific gifts changed totally from the original document and included Respondent, who was to receive $50,000.
Respondent prepared a second will and testament for Sylvia, which was executed on December 9, 1997. Respondent continued to be the executor of her estate. At the same time, Sylvia executed a second amendment to the living trust agreement that Respondent had prepared. Respondent remained the successor trustee in this and all the amendments to the trust. Besides $50,000 to Respondent, the specific bequests included $50,000 to the Lyric Opera of Chicago. Respondent notified Jonathan Siner, the Lyric Opera's Director of Planned Giving and an attorney, of Sylvia's intended gift. He had Sylvia execute the gift agreement that Siner prepared in response, and returned it to Siner along with a copy of the second amendment.
Both Respondent and the Lyric Opera continued to be the beneficiaries of $50,000 gifts in the third through eighth amendments to the living trust agreement, which were executed between November 10, 1998 and July 9, 2004. The amendments became necessary as beneficiaries died or fell out of favor with Sylvia, such as when a nephew borrowed $10,000 and did not repay it.
The ninth and final amendment to the trust was executed on May 17, 2006. Respondent's share of Sylvia's estate was increased to $75,000.
By October 2006, Sylvia was no longer able to care for herself. Her doctor recommended a nursing home or a caregiver, and Respondent arranged to hire Pilar Porcioncula as her caregiver. While Sylvia needed help with such things as bathing, dressing and walking, in the beginning she still "understood things," in Pilar's opinion.
During that time, Respondent visited Sylvia two or three times each month. They would talk together, and talk with Pilar. Pilar would bring him the mail that had arrived since his previous visit, and he would open it and discuss it with Sylvia. Respondent had Sylvia's power
of attorney and as she was no longer able to do so, Respondent managed her accounts and paid all of her bills.
In March 2008, Sylvia was admitted to St. Joseph's Hospital. Pilar stayed with her and after nine days, Sylvia was moved to a nursing home, where she remained for a week before she died. Pilar was with Sylvia when she passed away on March 22, 2008, and contacted Respondent, who took care of all the necessary arrangements.
On April 12, 2008, Respondent, as executor and trustee of Sylvia's estate, wrote each of the beneficiaries. He enclosed a copy of the ninth amendment to the living trust agreement, but advised them that while it included $300,000 in specific bequests, the cost of Sylvia's care during the final eighteen months of her life had diminished the estate to below that figure. Respondent anticipated that each of the bequests would be reduced by approximately twenty percent. There would be nothing left for the residuaries.
Siner testified that in 1997, when he received a copy of the second amendment to Sylvia's living trust, he did not examine it other than to make sure that it contained the bequest to the Lyric Opera. After reading the ninth amendment, Siner became concerned as it appeared that were it not for the $75,000 bequest to Sylvia's lawyer, the other beneficiaries would receive their bequests in full. Siner forwarded the matter to the Lyric Opera's attorneys. He also wrote the ARDC to avoid a possible Himmel violation.
On July 28, 2008, the Lyric Opera's lawyers wrote Respondent, enclosing a draft complaint alleging undue influence on his part. The complaint asked that the Lyric Opera receive the full amount of its gift and that the bequest to Respondent be declared invalid. It had not been filed, in order to allow Respondent an opportunity to provide "information which would
sufficiently demonstrate that there was no undue influence involved in your drafting of Ms. Margolis's Trust Agreement and the inclusion of a distribution to yourself."
Respondent testified that he was not aware of Rule 1.8(c), or aware that his preparation of Sylvia's estate documents created a conflict of interest, until disciplinary proceedings were initiated.1 Respondent settled Sylvia's estate by reducing his own bequest by approximately twenty percent. The remaining beneficiaries received their gifts in full.
Neither party objects to the Hearing Board's factual findings or findings of misconduct. They are supported by the evidence and therefore, they are affirmed.
We turn, therefore, to the issue of the appropriate sanction. The Hearing Board recommended that the Respondent be censured, but its recommendation is advisory only. In re Hopper, 85 Ill.2d 318, 325, 423 N.E.2d 900, 53 Ill. Dec. 231 (1981). In making its own recommendation, the Review Board must consider the case based on its own particular facts and circumstances, yet keep in mind that the purpose of discipline is not to punish the individual respondent, but to protect the public, to maintain the integrity of the profession and to protect the administration of justice from reproach. In re Timpone, 157 Ill.2d 178, 197, 623 N.E.2d 300, 191 Ill. Dec. 55 (1993). Mitigating and aggravating factors are also relevant. In re Witt, 145 Ill.2d 380, 398, 583 N.E.2d 526, 164 Ill. Dec. 610 (1991).
The Hearing Board made no findings in aggravation. It found in mitigation that there was no evidence that Respondent's actions resulted from corrupt or dishonest motives. He had "a solid reputation" for honesty and integrity. Respondent had no previous discipline in more than forty years in practice and was cooperative in these proceedings. He performed significant legal pro bono work. The Hearing Board found that minimal discipline was particularly warranted because Respondent posed no threat to any future client.
Respondent's lack of awareness of Rule 1.8(c) does not excuse his misconduct. See In re Howard, 188 Ill. 2d 423, 440, 721 N.E.2d 1126, 242 Ill. Dec. 595 (1999). Nevertheless, after consideration of the particular facts and circumstances of this case, including the mitigating factors, and the cases cited by both parties and by the Hearing Board, we conclude that censure is appropriate. To recommend a sanction more severe than censure would require us to ignore the extensive evidence of the family-like relationship of almost fifty years between Respondent and Sylvia Margolis. It would require us to ignore the Hearing Board's findings that the evidence did not show that Respondent took advantage his relationship with Sylvia for his own gain, and that Sylvia's bequest to Respondent was consistent with their long friendship and with her expressed intent.
Bruce Mason described his relationship with Herman as being like a grandson and grandfather. David also thought of the Margolises like grandparents. The relationship between the families changed when the Masons moved to Northbrook in 1967 and they no longer had daily contact, but Respondent's relationship with the Margolises continued. He knew that Herman's health was not good, and continued to check on his welfare. The families still got together for dinner. When the Margolises went on trips, they invited the Masons to see their slides. Herman and Sylvia attended the Mason boys' bar mitzvahs and their weddings.
The families also had a different relationship during the years when the Margolises lived in Florida, and when Sylvia returned to Florida for a few years after Herman's death, but they remained important to each other. They spoke by telephone, and when Respondent and his wife took a trip to Florida, they visited Herman and Sylvia. When Bruce and his wife went to Florida to introduce their six-month-old daughter to his wife's grandparents, they also visited Sylvia.
We find it significant that when the Margolises returned to the Chicago area in 1988, and when Sylvia returned in 1992, Respondent again became a primary figure in their lives. He visited Herman many times before his death. He visited Sylvia monthly between 1992 and 2006, and more frequently after that. Pilar testified that Respondent was the only person to visit during the nineteen months that she took care of Sylvia, other than Sylvia's niece, who came twice and a cousin who visited once. It was Respondent whom she called when Sylvia was hurt or sick, or had a doctor's appointment. It was Respondent who received the condolence cards from those who had contact with Sylvia near the end of her life, who gave Sylvia's eulogy and who handled her personal effects.
Sanctions imposed in cases of attorneys who benefit from self-prepared documents cover a wide range. We have examined the cases cited by the Administrator in support of his argument for a three month suspension, and they do not change our recommendation.
The respondent in In re Beaupre, 03 SH 32 (Hearing Bd., Aug. 16, 2004), aff'd, (Review Bd., Apr. 15, 2005), Administrator's petition for leave to file exceptions allowed, sanction modified, M.R. 20233 (Sept. 26, 2005), had what was described by the Hearing Board as a "long and loving relationship" of approximately 25 years with an older married couple, and did not charge them for legal work. Over a period of nine years, Beaupre prepared a series of wills for them which left personal property and money, and in the final version, the entire residuary estate, to him and his wife. The majority of the Hearing Board found that the respondent did not exert undue influence over his client. However, the panel agreed that he did overreach the attorney-client relationship, which it found occurs "when an attorney takes undue advantage of or abuses the position of influence he or she holds in relation to a client. See In re
Rinella, 175 Ill. 2d 504, 516, 677 N.E.2d 909, 915 (1997)." In re Beaupre, Id., 03 SH 32 (Hearing Bd., Aug. 16, 2004) at 21. The Hearing Board found Respondent did neither in this case. Beaupre's conflict of interest also included his initial representation of the defendants when previous beneficiaries and those whose shares of the estate had been diminished filed suit. Beaupre was suspended for ninety days. While we acknowledge the similarities between Respondent's case and Beaupre's, like the Hearing Board, we conclude that because of Respondent's lack of overreaching, less egregious conflict of interest and greater demonstration of care for Sylvia, suspension is not necessary here.
The respondent in In re Saladino, 71 Ill.2d 263, 375 N.E.2d 102, 16 Ill. Dec. 471 (1978), represented a client who had also been his friend for more than ten years in her purchase of a house. He had the title put in his name and his wife's, claiming that he intended the arrangement to be "trust-like." The closing statement indicated that the client was the purchaser. When his client discovered what the title showed and demanded that the property be placed in her name, the respondent conveyed it to her the next day. Saladino also prepared a series of wills for his client in which he received small bequests. In the final version, she left a diamond ring to Saladino's wife and after some other specific bequests, the entire residue of her estate to Saladino. His client was very confused when she testified before the Hearing Board and the court found that there was not clear and convincing evidence that the will actually carried out his client's wishes. Saladino was suspended for three months. However, the Hearing Board in the present case found the bequests to Respondent to be consistent with Sylvia's intent.
Additionally, the Administrator suggests that while in the past, attorneys were censured or reprimanded for taking improper gifts from clients, more recent case decisions show increased sanctions for those who breach their fiduciary duty to elderly or vulnerable clients.
After examining the cases that he cites, we conclude that it is not the time frame in which they were decided that resulted in the greater sanction, but rather the fact that none of them show evidence of any personal relationship between the attorney and client and all of them show harm resulting to the client. They are therefore inapplicable to Respondent's situation.
In In re Cutright, 233 Ill.2d 474, 910 N.E.2d 581, 331 Ill. Dec. 172 (2009), the respondent prepared a will for a client and another document that forgave a $312,900 debt owed to her by a company owned by other clients of the respondent's. The will was eventually found invalid as Cutright's client had second stage Alzheimer's disease and lacked testamentary capacity when she signed it. Respondent also provided a judge with free legal services, a gift that was never disclosed to any opposing counsel, and neglected an estate matter for seventeen years. He was suspended for two years for misconduct that "was ongoing and arose out of three separate acts involving multiple clients." Id., 233 Ill.2d at 491, 910 N.E.2d 581, 331 Ill. Dec. 172.
The respondent in In re Winthrop, 219 Ill.2d 526, 848 N.E.2d 961, 302 Ill. Dec. 397 (2006), was asked by a former client, Farouq Nobani, to prepare a will for Corinne Rice, a 92-year-old woman. Rice told him that she wanted Nobani to handle all of her financial affairs. Winthrop drafted a power of attorney giving Nobani "unfettered discretion" to do so, as he "gleaned" that this was what Rice wanted. Rice was ultimately found to be incapable of making personal or financial decisions, and the public guardian was appointed. Winthrop faced several charges of misconduct, but the court found only that he was dishonest and made a false statement of material fact to the attorney for a social service agency when he told her that she did not need to pursue an order to freeze Rice's assets because Nobani was denied all access to all of Rice's accounts. In fact, Nobani had begun withdrawing funds and using them to pay his personal bills.
A significant factor in the court's order of a two-year suspension seemed to be Winthrop's prior suspension of two years for misconduct that included conversion and repeatedly making false statements under oath. Additionally, the court considered the harm that could have resulted if the attorney had believed the freeze order was unnecessary and Nobani continued to withdraw Rice's funds.
The respondent was suspended for one year in In re Jones, 07 SH 18, (Review Bd., Mar. 17, 2010), Administrator's petition for leave to file exceptions allowed, sanction modified, M.R. 23856 (Sept. 20, 2010), after she arranged for her life partner to purchase farmland from two elderly clients at considerably less than market value. The first parcel was purchased for $142,825 and resold six months later for $250,000. The second parcel was purchased from Jones' seriously ill and hospitalized client for $200,000 after it had been appraised at $436,300.
Although it is not applicable in these circumstances, we note additionally that on January 2, 2010, Rule 1.8(c) was revised to read as follows:
A lawyer shall not solicit any substantial gift from a client, including a testamentary gift, or prepare on behalf of a client an instrument giving the lawyer or a person related to the lawyer any substantial gift unless the lawyer or other recipient of the gift is related to the client. For purposes of this paragraph, related persons include a spouse, child, grandchild, parent, grandparent or other relative or individual with whom the lawyer or the client maintains a close, familial relationship, (emphasis added).
While the question has not reached our courts as yet, other jurisdictions have concluded that a close, familial relationship in the context of a disciplinary setting is not necessarily a biological one.
The respondent in In re Peeples, 297 S.C. 36, 374 S.E.2d 674 (1988), met Pauline Knight in 1964. She was his client first, but became a very close friend. For approximately 18
months in 1972-74, they were next door neighbors and during that time, Knight and her husband came to regard Respondent's two daughters as their granddaughters. In 1973, Peeples prepared two wills for Knight that left the residue of her estate to her husband for his lifetime, with the remainder to the respondent's older daughter. In 1974, after Peeples had been elected a circuit court judge but before he took office, he prepared a third will that left Knight's entire estate to her husband for his lifetime, and the remainder to the respondent's two daughters. Knight's husband was the executor, and respondent the alternate executor of all three wills. Due to her failing health, the respondent arranged for Knight to be moved to a nursing home in 1983, and agreed to be responsible for any bills that she did not pay. Knight's husband died shortly afterward. When Knight died in 1986, the respondent became the executor of her estate. Disciplinary charges were filed that alleged in part that Peeples had violated Canon 5D of the South Carolina Code of Judicial Conduct, which prohibited a judge from serving as an executor or other fiduciary. The South Carolina Supreme Court found no violation, due to an exception that allowed him to do so for "a person with whom the judge maintains a close familial relationship." The court concluded that the record clearly supported the finding of a close familial relationship between the parties.
In Advisory Opinion #5-89, the Indiana Commission on Judicial Qualifications2 answered the question of whether a judge could hold a power of attorney and serve as the executor of the estate of a family friend without violating Canon 5 of the Indiana Code of Judicial Conduct. The canon prohibited him from doing so unless the decedent was a member of his family, which it defined similarly to Rule 1.8(c)'s current definition of a related person: "a spouse, child, grandchild, parent, grandparent or other relative or person with whom the judge maintains a close familial relationship." The judge had known the friend in question since he
was a young child. Their families had been neighbors and close friends for forty years. The friend and his wife were childless, and the judge looked after the couple and helped them during the wife's illness and death. At the time of the inquiry, the friend was 95 years old. For his convenience, the judge had been given his power of attorney, paid his bills and otherwise handled his affairs. In concluding that the judge could act as a fiduciary in this instance, the Commission quoted Webster's Third New International Dictionary's definition of "familial," which was in part, "of, relating to, or having the characteristics of a family." The Commission found that the judge's role in his friend's life had been "filial in nature, nurturing, personal and lasting. These are, ideally, the characteristics of a close family relationship."
The Court of Judicial Discipline of Pennsylvania considered this issue for the first time in In re Horgos 682 A.2d 447 (1996), when charges were brought against a judge who acted as executor of an estate when he was not related to the decedent. Canon 5D of the Pennsylvania Code of Judicial Conduct's definition of a family member was identical to Indiana's. Citing Peeples and the Indiana Advisory Opinion, the court concluded that "a close familial relationship can exist even when no bond of blood or marriage exists, and even when two unrelated persons have never cohabited." Id. at 451. Although it cautioned that the issue must be decided on a case by case basis, the court held that that such a relationship would be found when it resembled a family relationship, was nurturing and possessed characteristics typical of a traditional family. Id. at 452.
It is clear from the evidence that a close, nurturing, familial relationship existed between Sylvia and Respondent. Sylvia considered Respondent to be her family. Given the unique circumstances of this case, namely the long-term, close relationship between the parties, the care that Respondent provided to Sylvia at the end of her life and the other evidence in
mitigation, we conclude that censure is appropriate. Therefore, after consideration of all the circumstances of this case, we affirm the Hearing Board's factual findings and findings of misconduct and recommend that the Respondent, Leonard Mason, be censured.
Date Entered: 02 September 2011
Daniel P. Duffy
1 Respondent testified that while he was not aware of Rule 1.8(c), he recalled learning in law school that if a client offered a lawyer anything more than fees, she should be told to seek a second opinion. The Hearing Board found that he had advised Sylvia to do so on one occasion. According to Respondent, Sylvia responded firmly that she did not want a stranger to know her business.
2 While the views of the Indiana Commission on Judicial Qualifications are not necessarily those of the Indiana Supreme Court, compliance with its opinions is considered to be a good faith effort to comply with the Code of Judicial Conduct.