Donation To Christian Camp Not Unethical
An Illinois Hearing Board (over a dissent) has found no misconduct in a case where an attorney was charged with a conflict of interest in drafting a gift to a camp founded by his family
In approximately 2003, Respondent and his father and brothers decided, at Respondent’s suggestion, to use thirty-four acres of land in Wisconsin that had been in his family since the 1940s to develop a non-denominational Christian camp. Thereafter, Respondent’s father deeded the thirty-four acres of land into a charitable trust (Jaros Charitable Trust), which he had previously established. Respondent and his brothers were the trustees of the Jaros Charitable Trust. In addition, the Jaros Charitable Trust had a net worth of $5 million.
He and his brother’s envisioned that the camp would host summer camps for children and during the other season host retreats for pastors, college students, and other adults. As the plans for the camp developed, it was decided that the camp would be equipped to serve children with special needs. Respondent intended to teach at the camp, and upon retirement, he planned to move to the area and teach more often.
The allegations involved a client’s bequest of $425,000 to the camp.
The Hearing Board
The evidence in this matter is not contradicted. Respondent was an extremely credible witness, who exuded candor and professionalism during his testimony. Respondent, who we believe practices with the utmost integrity, did not believe a conflict of interest existed as Ms. Cooney, who was well-informed, independently decided what individuals and charities to leave her estate to and Respondent had no say in this matter. We agree it was logical to conclude there was no conflict of interest.
Ms. Cooney’s decision to leave money to the camp was well-informed and based on a long-time friendship with Respondent. The evidence demonstrates she knew about the camp since around the time it was first envisioned, she had independently reviewed the plans for the camp, and knew the camp was a Christian camp that would serve children, some of whom had special needs. She was also aware of Respondent’s role in the camp. She knew he was in charge of the camp and was greatly involved and interested in its development. Also, given her repeated discussions with Respondent, she knew she did not need to make any charitable donations, which included a donation to the camp, in 2009 and 2010 in order to avoid estate taxes. Moreover, Ms. Cooney had been friends with Respondent for years, frequently had dinners with him, and, as one witness testified, would have been interested in things that interested him. Thus, a donation to the camp, which she believed was a worthy cause, was not unreasonable...
In addition, Ms. Cooney was a strong, independent business woman. She made her own decisions and was not easily swayed. In consideration of the testimony from every fact witness and the persuasive evidence regarding the three independent notaries, two of which were attorneys, who privately met with Ms. Cooney, we are confident she decided on her own volition to make the charitable donation to the camp. This was her decision to make and Respondent was not involved in this decision, just like he was not involved in her decision regarding what individuals to leave money to. See id. at 238 (noting that Barrick was included in his client’s will “at his client’s insistence and in his client’s interest”). Also, after listening to Respondent’s testimony and observing his demeanor, we believe that had Ms. Cooney decided to reduce or eliminate her donation to the camp, Respondent would have, without question, heeded her wishes and made the requested changes because, once again, he correctly believed this was her decision.
In conclusion, we find the Administrator did not meet his burden and specifically prove how Respondent’s representation of Ms. Cooney was or even could have been materially limited by his own interest. There was no evidence that Ms. Cooney’s and Respondent’s interests diverged and we were not convinced by the Administrator’s argument that this was even a possibility given our foregoing findings.
Moreover, even if we had found the existence of a conflict of interest, it is a clear and reasonable inference, given Ms. Cooney’s extensive and long-standing knowledge of Respondent’s support and investment in Eagle Cove, she consented by implication, if not overtly, to any arguable conflict of interest in Respondent assisting both Eagle Cove and her. In addition, the evidence regarding Ms. Cooney’s personality and demeanor, coupled with her knowledge of the camp and Respondent’s involvement therein, convinces us both that Respondent reasonably believed his representation of Ms. Cooney would not be adversely affected by the gift to the camp and any further disclosure of his interests or of the conflict would have been futile. Neither Respondent nor anyone else would have been able to provide Ms. Cooney with information she did not already know and change her mind regarding her donation. This is demonstrated by her decision to leave money to the camp in 2009 and 2010, after being told by Respondent that this was not necessary to reduce or avoid estate taxes.
The dissent would find the conflict
The evidence demonstrates Respondent as the President and founder of SLCC/Eagle Cove had a strong interest in the development of the camp, and obtaining a donation from Ms. Cooney helped make that possible. This is demonstrated most significantly by the application for the conditional use permit, in which Ms. Cooney’s death-time donation had been referenced. Further, Respondent admitted that Ms. Cooney’s donation brought the camp closer to its $3 million dollar fundraising goal and lessened the amount he would have to personally guarantee if the camp was unable to meet this goal. Had Ms. Cooney asked Respondent to revise her trust to eliminate or reduce her donation to the camp, the interests of Ms. Cooney and Respondent would have diverged. Thus, a potential for diverging interests existed from the moment Ms. Cooney had first requested Respondent revise her trust to make a death-time donation to the camp.
Further, this potential for diverging interests, in my view, was strong enough to pose a “significant risk” that Respondent’s representation of Ms. Cooney would be materially limited by his own interests. The evidence shows Ms. Cooney frequently met with Respondent and directed him to amend her trust and the charitable donations therein. Further, in 2009 and 2010, she did not need to make death-time charitable donations in order to avoid estate taxes, and as a result, she reduced or eliminated most of her charitable donations. Yet, her death-time donation to the SLCC/Eagle Cove remained unchanged. Respondent should have realized given the frequency and the substance of these interactions that he was or very easily could be in a position of choosing between conflicting interests. As a result, Respondent had an obligation to make an adequate disclosure to Ms. Cooney regarding the nature of the conflict and to get her informed consent before proceeding to represent her. Respondent, however, admitted this did not take place as he did not believe a conflict of interest existed.
My take: The dissent, which calls for a reprimand, makes a strong case that, however much one may wish to give the attorney a free pass for lifetime achievement, this situation violated conflict of interest prohibitions.
I’d be suprised if the Administrator did not file an exception here. (Mike Frisch)