Judge Was Bad Judge Of Character
The Indiana Supreme Court accepted a 45-day suspension of a judge who appointed a friend who turned out to be a untrustworthy trustee
We find that Respondent, the Honorable Robert W. Freese, Judge of the Hendricks Superior Court 1, engaged in judicial misconduct by appointing an unqualified friend as trustee of a trust and personal representative of a related estate, failing to disclose the friendship or a financial relationship with the friend, and failing to act promptly when faced with mounting evidence of the friend’s mismanagement and embezzlement of the funds entrusted to him.
The story
In 2004, Scott needed $122,400 to buy a home but had poor credit after a bankruptcy. Judge Freese used his line of credit to lend Scott the funds. On January 13, 2005, they executed and recorded a mortgage in that amount, and Scott gave the Judge a promissory note.
Seventeen days later, Judge Freese appointed Scott as trustee over the Herbert Hochreiter Living Trust in Trust of Herbert Hochreiter, No. 32D01- 9710-TR-000003. None of the parties objected, but the Judge never disclosed his financial arrangement with Scott.
Later in 2005, Herbert Hochreiter died, and an estate was opened with an estimated $2.3 million in real and personal property. Judge Freese took the matter under advisement after a hearing, and on October 24 appointed Scott as personal representative of the Estate. As before, none of the parties objected, nor did the Judge disclose his financial arrangement with Scott.
Over a period of years
the Judge had multiple indications of Scott’s poor performance: Summonses sent to Scott were returned to sender. Scott’s counsel requested the court’s guidance and intervention, reporting that Scott was unresponsive and that the Trust checking account contained only $8.27 and its savings account had been closed for over 6 months—when counsel estimated it should have $50,000 to $60,000 in cash. And one of the beneficiaries filed a detailed objection and multiple rules to show cause or contempt citations against Scott. Judge Freese “took no action or minimal action” on those reports. But while the cases were pending and Scott was living in Florida, he left Scott a phone message stating he was concerned that Scott was behaving bizarrely, and that he “would never have thought [Scott] would have stolen anything.”
The less than great Scott had run off with nearly $600,000 and the judge entered a judgment against him but
Judge Freese never referred those findings to the local prosecutor or to the United States Attorney. But Scott pleaded guilty in 2017 to federal charges stemming from his embezzlement, which took place from August 2007 through July 2011. The stolen funds remain unrecovered.
Level of culpability
Unlike typical violations of Rule 2.4(B), the Judge’s misconduct was mostly negligent, not willful…
But the Judge’s misconduct ultimately enabled a massive theft. First, appointing Scott violated Rule 2.13(A)(1)’s duty to make “appointments . . . impartially and on the basis of merit”—he lacked fiduciary experience and had been bankrupt recently enough to have poor credit. Subjectively, the Judge trusted Scott, as his loan shows. But objectively, Scott was utterly unqualified to be entrusted with a third party’s money; appointing him seems to have been driven by friendship, not merit. Then, that friendship clouded the Judge’s objectivity through seven years of warning signs— making him unreasonably credulous of, and lenient towards, Scott in the face of growing evidence of serious financial misconduct. If not for the Judge’s inaction, Scott’s theft likely could have been largely prevented.
After review of the precedents
The parties here have agreed to a 45-day suspension—squarely between the above guideposts. “The purpose of judicial discipline is not primarily to punish a judge, but rather to preserve the integrity of and public confidence in the judicial system and, when necessary, safeguard the bench and public from those who are unfit.” Hawkins, 902 N.E.2d at 244 (Ind. 2009). The sanction must be designed to deter similar misconduct and assure the public that judicial misconduct will not be condoned. Id. As the above cases illustrate, a 45-day suspension from office without pay is a very serious sanction, but we agree it is warranted here, in view of the serious harm to the Trust and Estate that were enabled by the Judge’s misconduct.
(Mike Frisch)