Filed April 27, 2015
In re Justin Joseph Tedrowe
Commission No. 2014PR00091
Synopsis of Hearing Board Report and Recommendation
The Administrator filed a one-count Complaint against Respondent alleging he engaged in dishonesty and fraud by altering a document after it was signed by the opposing party in a domestic relations matter, and then representing to a third party that the document was consistent with the intent of the signor.
Based on the evidence received, the Hearing Board found that the Administrator did not prove the misconduct alleged in the Complaint and therefore recommended dismissal of the charges.
BEFORE THE HEARING BOARD
ILLINOIS ATTORNEY REGISTRATION
In the Matter of:
JUSTIN JOSEPH TEDROWE,
Commission No. 2014PR00091
REPORT AND RECOMMENDATION OF THE HEARING BOARD
The hearing in this matter was held on February 11, 2015 at the offices of the Attorney Registration and Disciplinary Commission ("ARDC") before a hearing panel consisting of Stephen S. Mitchell, Irene F. Bahr, and Robert D. Smith. Robert J. Verrando represented the Administrator of the Attorney Registration and Disciplinary Commission. Respondent Justin Joseph Tedrowe ("Respondent") appeared and was represented by Mary Robinson and James A. Doppke, Jr.
On July 30, 2014 the Administrator filed a one-count Complaint against Respondent alleging he attempted to defraud a litigation opponent by altering a document after it was signed and then falsely describing the document as reflecting the signatory's intent. The Complaint further alleged that Respondent attempted to effectuate a transfer of funds in excess of the amount ordered by the court.
On September 8, 2104 Respondent filed an Answer to the Complaint in which he admitted changing the terms of a previously-executed form, but denied that he did so dishonestly or that he engaged in any professional misconduct.
Respondent is charged with engaging in conduct involving dishonesty, deceit, fraud, or misrepresentation in violation of Rule 8.4(c) and conduct prejudicial to the administration of justice in violation of Rule 8.4(d).
The Administrator presented the testimony of Kathy Molitor, Caryn Mazzulo and Respondent. Respondent then testified on his own behalf. The following exhibits were admitted into evidence: Administrator's Exhibits 1 through 9, and Respondent's Exhibits 5, 8, 18 and 19.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
In attorney disciplinary proceedings the Administrator has the burden of proving the charges of misconduct by clear and convincing evidence. In re Winthrop, 219 Ill. 2d 526, 542, 848 N.E.2d 961 (2006). Clear and convincing evidence constitutes a high level of certainty, which is greater than a preponderance of the evidence but less than proof beyond a reasonable doubt. People v. Williams, 143 Ill. 2d 477, 577 N.E.2d 762 (1991). Suspicious circumstances, standing alone, are not sufficient to warrant discipline. Winthrop, 219 Ill. 2d at 550.
I. Respondent is charged in Count I with engaging in conduct involving dishonesty, fraud, deceit or misrepresentation in violation of Rule 8.4(c).
A. Evidence Considered
The Molitor Divorce
Respondent represented Matthew Molitor in a domestic relations case filed by Kathy Molitor in the Circuit Court of Will County. Kathy and Matthew held a Pacific Life Insurance Company Annuity and, as part of the marital settlement, Kathy agreed to divide the annuity with Matthew. She also agreed, at the prove-up of her case, that their goal was to avoid the expense of obtaining a Qualified Domestic Relations Order ("QDRO") in relation to the annuity, if at all possible. (Ans. at par. 1, 2; Tr. 13-14, 29, 120-22).
On August 22, 2013 Judge Robert Brumund entered a judgment of dissolution in the Molitor case. Thereafter, in or about September 2013, Respondent issued a subpoena to Richard Ozols, the Molitors' long-time financial advisor, to produce a list of their assets. When Respondent received the information from LPL Financial, the custodian of the records, he discovered Kathy had closed an account during the divorce proceedings. He then filed a Petition for Rule to Show Cause regarding that issue and other issues relating to the division of marital property. Respondent testified the petition was one of several that were necessitated by a lack of responsiveness from Kathy's attorney, Marc Wolfe, regarding asset division. (Ans. at par. 4; Tr. 29, 52-56, 109; Resp. Ex. 5).
Kathy confirmed that Ozols is her financial advisor and assisted her in making the withdrawal that was brought to the attention of the court. Ozols resided in Illinois at one time, but now works out of Tucson, Arizona. In March 2014, Kathy sent an e-mail to Ozols complaining about being brought back to court so many times by her ex-husband and referring to her divorce case as a horrific saga. (Tr. 109, 125, 127).
Division of the Pacific Life Annuity
On February 10, 2014 Judge Robert Brumund entered an order in the Molitor case directing that the "Pacific Life annuity shall be immediately divided 50/50 with each party entitled to withdraw their share," and continuing the matter to March 11, 2014 for division of the remaining assets. The order also indicated that a motion by Kathy's attorney to withdraw from the case was entered and continued. (Tr. 15; Adm. Ex. 15).
Respondent identified a four-page Pacific Life withdrawal request form which he filled out on February 10, 2014 and gave to Kathy's attorney on that date. The form bears the date of February 10, 2014 next to the signature line. The first page of the form lists Kathy Molitor as the owner of the annuity, and indicates she would be withdrawing 50% of the value and surrendering 50% of the value. The form included instructions for sending Matthew's portion of the annuity to Respondent, although Respondent's client fund account information was not included at that time. Respondent believed the form was sufficient to withdraw the funds as ordered by the court. His telephone records reflect a February 10, 2014 telephone call from his office to Richard Ozols. (Tr. 16-67, 47, 59, 64; Adm. Exs. 2, 3, 8).
As of February 27, 2014, Respondent had not received the withdrawal form with Kathy's signature and on that date, he filed a Petition for Rule to Show Cause why Kathy should not be held in contempt. He attached a copy of the form to his petition. On March 4, 2014, the judge issued a Rule to Show Cause against Kathy. (Tr. 20, 23, 59; Adm. Exs. 3, 4).
Kathy Molitor identified her signature on a Pacific Life withdrawal request form and testified she signed it in court, possibly on March 11, 2014, although it was dated February 10, 2014. She recalled that at the time she signed the form, the first page reflected her request to withdraw 50% of the value of the annuity and to surrender the other 50% of the value. (Tr. 106-107, 128; Adm. Ex. 2).
The form with Molitor's signature was returned to Respondent, and on March 11, 2014 the court discharged the Rule to Show Cause. On that same date, the court entered a separate order requiring Kathy to pay Matthew $18,614, which amount represented her reimbursement to Matthew for the account she had closed months earlier. (Ans. at par. 4; Tr. 23, 25, 56-60, 118-19, 124; Adm. Exs. 5, 6).
Respondent recalled receiving the Pacific Life withdrawal request form signed by Kathy, and enclosing it with a letter to Richard Ozols at Ozols Investment Management Ltd. Respondent's letter, which he sent by Federal Express on March 11, 2014, specified that "[p]er the instruction sheet enclosed herewith, the funds are to be withdrawn and electronically deposited to the Justin J. Tedrowe, Attorney at Law, Client Trust Account pursuant to the details enclosed herewith." The letter further requested Ozols to confirm receipt of the document, advise what the process would be and how long it would take, and contact Respondent if anything was confusing or deficient. Respondent testified the form enclosed with the letter was not altered from when Kathy signed it, and the first page reflected that she was withdrawing 50% of the value of the annuity and surrendering 50% of the value. The form included his client fund account number and a copy of a voided check. (Tr. 28, 31-32, 60-63, 65; Adm. Ex. 7).
Respondent identified a March 15, 2014 telephone message from Ozols, as recorded by his legal assistant, indicating that Ozols would be checking with Pacific Life during the next week. Respondent believed Ozols was providing him with a status report and was planning to see if the withdrawal form was acceptable to, and being processed by, Pacific Life. Respondent never anticipated any problem with the form. (Tr. 66-68).
Respondent testified that sometime after March 11, 2014, he was advised by Ozols that Pacific Life was requesting a QDRO. Respondent then informed Ozols that obtaining a QDRO would be a waste of money and that Kathy had agreed to use the Pacific Life annuity to avoid
that situation. Respondent recalled being shocked because he had been handling divorce cases for forty-two years and knew that a QDRO, which requires a technical evaluation and process for court approval, was expensive and unnecessary. He testified he told Ozols he would modify the form in a way that would avoid the need for a QDRO, and he asked Ozols to run it by Kathy for her approval. He recalled that Ozols agreed to proceed in that fashion and to check with the corporate personnel who had to review the form. (Tr. 32, 39-40, 44, 71, 73-74).
Respondent revised the first page of the Pacific Life withdrawal request form by crossing out the option for "withdraw 50% of value," and crossing out the words "50% of value" that had been written in after the "surrender of the contract" option. As a result, the form reflected a request for 100% of the annuity to be surrendered and transferred to Respondent's client trust account. Respondent inserted an arrow in the margin pointing to the revision because he wanted to call attention to the change from the original form he had sent to Ozols. He testified the original form had no scratch-outs or arrow because no changes had been needed at that point. (Tr. 48, 75-76; Adm. Ex. 7).
Respondent testified he sent the revised form to Ozols and requested that Ozols check with Kathy to see if she would agree to the change. Respondent was aware Ozols communicated with Kathy regularly and did not expect him to send the revised form to Pacific Life without Kathy's agreement. In retrospect, Respondent recognized the better practice would have been to use a clean form to make the revisions and to write another cover letter. (Tr. 29-30, 32, 74-75, 77, 101).
Caryn Mazzulo, Respondent's legal assistant since 2008, testified that Richard Ozols, the LPL financial advisor in the Molitor case, left a message on Respondent's voice mail on March 15, 2014. Respondent's telephone records reflect calls from his office to Ozols on March 17, 18 and April 1, 2014. Respondent recalled he was checking on the status of the withdrawal form
and believed the telephone call of March 18, which was over four minutes, reflected his conversation with Ozols about the need for a QDRO. A fax header on a copy of the February 10, 2014 court order reflects that Respondent faxed that order to Ozols on March 18, 2014. Respondent drew an arrow next to the provision in the order requiring the 50/50 division of the annuity. (Tr. 70, 73, 81, 176, 179; Resp. Exs. 18, 19).
Respondent did not hear from Ozols between March 18 and April 1, 2014, nor did he get any response from Kathy's attorney. Respondent identified a telephone message indicating that Ozols called his office on April 1, 2014 and left the message that "Kathy has all forms with directions." Respondent interpreted the message to mean that Ozols was sending Kathy the modified withdrawal form for her approval, and would have her re-sign the form or initial the revision before sending it to Pacific Life. (Tr. 82-86, 96, 100).
Respondent heard nothing from Ozols after April 1, 2014. On April 8, 2014, Respondent filed a Petition for Rule to Show Cause stating that Kathy had engaged in delays and subterfuge and asking the court to compel her to make the annuity withdrawal. With respect to an assertion on the first page of the petition that Kathy failed to sign the withdrawal documents, Respondent testified the statement was true because the form she signed was unusable after Pacific Life required a QDRO. The second page of his petition explained that Kathy had signed a withdrawal form, but had not signed additional papers sent to her on March 18, 2014. Respondent testified he was trying to convey that Kathy needed to sign the modified forms, and acknowledged his wording was inartful. With respect to his reference in the petition to Ozols as a Pacific Life "representative," Respondent testified that representation was true because Ozols sold Pacific Life products, but was not an employee of Pacific Life. Respondent did not advise the court of any revision to the form 49 or that he had attempted to have Pacific Life distribute the entire amount of the annuity. He stated that information would have come out when they appeared
before the judge to explain what had occurred. He denied trying to misrepresent anything to the court. (Tr. 42, 45-46, 49-50, 87-89; Adm. Ex. 8).
When Respondent was asked to review a copy of his March 11, 2014 letter with the revised withdrawal form attached to it, he denied the altered version of the form was sent with that letter. He noted the letter did not include any suggestion of a change to the form, as he did not know at that point that any change would be needed. He testified someone could have switched the first page containing the revision. (Tr. 31-32, 39, 41, 62, 99; Adm. Ex. 7).
When questioned about a fax header on the revised withdrawal form which bears the date of March 10, 2014 and consecutive page numbers on each page, Respondent stated any fax transmission was done by his legal assistant and he does not understand why the numbers appear the way they do. The fax header also includes a telephone number and "LTD Commodities," which Respondent identified as Kathy's number and place of employment. Respondent denied having any involvement with faxing the document on March 10 or, as reflected by a separate fax header, on May 27, 2014. The fax header with the March 10, 2014 date does not appear on the March 11, 2014 cover letter. (Tr. 33, 61-62,103; Adm. Ex. 7).
Kathy Molitor testified she had a conversation with Ozols regarding a withdrawal form that was different than the one she signed. She became worried that her funds were being taken from her in an illegal manner, and asked Ozols to fax the form to her. The multi-page form bore her signature but reflected a revised request that the full amount of the annuity be surrendered. Kathy denied signing, or being asked to sign, the document, and never authorized Respondent, or anyone else, to withdraw 100% of her annuity fund. When she saw the altered form, she was devastated because it appeared that the entire amount of the annuity was to be surrendered to her husband. (Tr. 112-13, 115; Adm. Ex. 7).
With respect to fax headers at the top of the revised form, Kathy confirmed that one of the times Ozols faxed the document to her was in May 2014. She could not explain the March 10, 2014 fax date that appeared to come from her fax number, because she did not have the altered document until Ozols sent it to her. (Tr. 116).
Kathy testified she filed a complaint against Respondent with the ARDC. She also sent a letter to the judge in her divorce case complaining about being brought to court by her ex-husband and about the annuity issue. In a second letter to the judge, she advised him she had requested an investigation by the ARDC. Kathy testified that the annuity is still being held by Pacific Life. (Tr. 121, 129-30).
Respondent acknowledged receiving a letter from the ARDC regarding a complaint submitted by Kathy, and he sent a reply on April 22, 2014. In his letter to the ARDC, he stated he made the alteration to the Pacific Life form after speaking to Ozols and advising Ozols of his intentions; he and Ozols agreed that Ozols would seek Kathy's approval for the change; and he always knew any change would require her approval. The letter does not state that he initially sent the unaltered form to Ozols with his March 11, 2014 cover letter. Respondent's letter expresses his opinion that Kathy reported his conduct out of vengeance for the many times he had to bring her into court, and in particular for advising the court that she withdrew funds from a marital account. (Tr. 32, 35-36; Adm. Ex. 9).
Respondent testified he prides himself in the way he practices and handles divorces. The revision to the Pacific Life withdrawal form was made for a good reason, and he was not trying to slip it past anyone. By suggesting that 100% of the annuity proceeds be transferred to his client trust account, he was not intending to take any money for himself or to act contrary to the court's order of a 50/50 split between the parties. He feels his revision reflecting a 100%
surrender was consistent with the court's February 10, 2014 order and with the parties' goal to avoid the use of a QDRO. (Tr. 78-79).
B. Analysis and Conclusions
The evidence showed that Respondent represented Matthew Molitor in his divorce from Kathy Molitor. As part of the division of marital property, the court ordered that a Pacific Life annuity be divided equally between the two parties. Respondent took measures to accomplish that objective by completing the appropriate Pacific Life withdrawal request form and obtaining Kathy's signature. Problems arose when he altered the form after she signed it.
Respondent fully acknowledged revising the form after Kathy signed it, but denied any intent to violate the court's order as to how the funds should be distributed or to deprive Kathy of her share of the funds. He testified he initially sent an unaltered copy of the signed withdrawal request form to Richard Ozols, Kathy's financial advisor and representative of Pacific Life, and only made the revisions after learning from Ozols that a QDRO might be required. He claimed he spoke to Ozols about the revisions, which were in the nature of a proposal, and expected Ozols to seek Kathy's approval before submitting the form to Pacific Life.
The Administrator attempted to prove that Respondent never sent the original unaltered request form to Ozols and instead, after receiving the signed form on March 11, 2014, immediately made alterations and sent the revised version to Ozols with the expectation that Ozols would submit it to Pacific Life and Pacific Life would then transfer 100% of the funds to Respondent's client trust account. The Administrator argued that Respondent engaged in fraud and deceit by attempting to pass off the altered form as the one signed by Kathy.
We found Respondent to be credible and his account of his actions to be supported by other evidence. In particular, the conspicuous manner in which he made revisions to the withdrawal form, including drawing an arrow in the margin to note the change, is consistent with
his contention that he had spoken to Ozols about modifying the document and was trying to direct Ozols' attention to the changes so Ozols could communicate them to Kathy. Clearly Respondent was not trying to conceal the revisions from Ozols or anyone else who would review the form. Further, it was readily apparent that the changes were not initialed, and that circumstance alone would alert anyone examining the form to the fact it had not been finalized.
Respondent's telephone records support his testimony that he had discussions with Ozols after he sent the letter of March 11, 2014. In particular, the longer call on March 18, 2014 is consistent with Respondent's memory that they discussed the QDRO issue and potential changes to the form on that date. His claim that the revised form was not sent with the March 11, 2014 letter is also supported by his April 8, 2014 Petition to Show Cause which recites that Kathy signed the Pacific Life withdrawal form, but then failed to sign additional papers sent to her on March 18, 2014. Respondent's assertion on the first page of that petition that Kathy had not signed the request form was somewhat confusing, but the events were clarified on the second page.
The Administrator argues that Respondent's March 11, 2014 cover letter to Ozols and his letter to the ARDC support the theory that he sent only the altered withdrawal form to Ozols. We do not accept that conclusion. The March 11, 2014 letter does not discuss the "withdrawal" versus "surrender" options or refer to any changes in the form, and while it makes general reference to depositing funds into Respondent's client trust account, no specific values or dollar amounts are mentioned. We view the lack of any reference to alterations as an indication that no alterations had been made at that point in time. As for Respondent's subsequent letter to the ARDC, we recognize there is no mention of his sending the unaltered version of the withdrawal form to Ozols, but neither is that possibility foreclosed by the language of the letter. He simply
does not address that circumstance. In our opinion, the letters are subject to interpretation and fall far short of establishing any nefarious act or motive by Respondent.
Respondent directed our attention to In re Landis, 05 CH 69, M.R. 22970 (Mar. 16, 2009). In that case an attorney representing the sellers in a real estate transaction made a change to a promissory note after being advised that the buyers and sellers had agreed to the change. He then sent the note to the buyers' counsel without mentioning the change, which was one of many, and the buyers did not discover the modification until after the closing had occurred. In finding the attorney did not act dishonestly, the hearing board noted that the attorney believed the parties had agreed to the change, he did nothing to conceal the change, and the change should have been obvious to the other attorney. The charges against the attorney were dismissed.
Similarly, in the case before us Respondent believed he was acting in accordance with the parties' agreement to avoid a QDRO, and revised the withdrawal form in a very conspicuous fashion. Further, he advised Ozols of his intent to modify the document and believed Ozols would seek Kathy's approval prior to proceeding.
We saw nothing suspicious about Respondent communicating with Ozols directly. He knew Ozols was Kathy's financial advisor and regularly spoke to her, he had requested and received information from Ozols in the past regarding the Molitors' marital assets, and Kathy's attorney had been unresponsive and had filed a motion to withdraw from the case. We do not view submission of the withdrawal form to Ozols as being equivalent to submitting it to Pacific Life, as the evidence showed Ozols was a financial advisor who dealt with Pacific Life, but was not an employee or agent of that company.
The Administrator asked us to compare this case to In re Barry, 2012PR00021, M.R. 25673 (Jan. 18, 2013) and In re Jacobs, 2013PR00064, M.R. 26759 (Sept. 12, 2014) where the attorneys prepared legal documents that were insufficient in some respect and then made false
and dishonest representations to conceal their errors. We see little parallel to the present case as we have accepted Respondent's testimony that he advised Ozols he was making a change to the withdrawal form, and the obvious scratch-outs and arrow belie any attempt to conceal the revision.
We conclude the Administrator did not prove by clear and convincing evidence that Respondent conveyed, or intended to convey, to Ozols that Kathy had approved the revisions to the withdrawal form, or that he submitted, or attempted to submit, the altered withdrawal form to Pacific Life without Kathy's approval. On the contrary, the evidence indicated that Respondent did nothing more than communicate a proposal to Ozols for transmission to Kathy, and did not represent to Ozols that she had already approved the changes. Accordingly, we find Respondent did not engage in dishonesty, deceit, fraud or misrepresentation in violation of Rule 8.4(c).
II. Respondent is charged in Count I with engaging in conduct prejudicial to the administration of justice in violation of Rule 8.4(d).
A. Evidence Considered
We consider the evidence summarized in the preceding section.
B. Analysis and Conclusion
An attorney's misconduct is prejudicial to the administration of justice if it has an impact on the representation of a client or the outcome of a case, undermines the judicial process or jeopardizes a client's interests. In re Storment, 203 Ill. 2d 378, 399, 786 N.E.2d 963; In re Thomas, 2010 IL113035, pars. 91, 123.In In re Karavidas, 2013 IL 115767, the Supreme Court found no prejudice to the administration of justice where the attorney was not involved in the judicial process at the time of his wrongful conduct. The Court also noted that the rule has been interpreted as requiring "actual" prejudice to the administration of justice.
We do not find a violation of Rule 8.4(d). The Administrator did not prove, by clear and convincing evidence, that Respondent's act of submitting the altered form to Ozols had any impact on his representation of his client or on the outcome of the post-judgment proceedings. While Kathy testified that the annuity funds were never distributed, we do not know the cause of the continued delay. What we do know is Respondent made repeated attempts to move the proceedings along and to comply with the court's order of February 10, 2014.
Likewise, the Administrator's assertion that Respondent attempted to cause the transfer of funds in excess of what was ordered by the court was not proved, as Respondent testified he had no intention of violating the court's order to divide the annuity 50/50. Rather, the evidence showed he was attempting to find a way to avoid the cost of a QDRO by having the total amount of the annuity surrendered and transferred to his client trust account. That action does not indicate that the funds would then have been distributed in a manner inconsistent with the court's order.
Having found the charges in the Complaint against Respondent Justin Joseph Tedrowe were not proved by clear and convincing evidence, we recommend dismissal of those charges.
Stephen S. Mitchell
I, Kenneth G. Jablonski, Clerk of the Attorney Registration and Disciplinary Commission of the Supreme Court of Illinois and keeper of the records, hereby certifies that the foregoing is a true copy of the Report and Recommendation of the Hearing Board, approved by each Panel member, entered in the above entitled cause of record filed in my office onApril 27, 2015.
Kenneth G. Jablonski, Clerk of the