Vermont Supreme Court Ratchets Up Sanction

The Vermont Supreme Court increased the sanction in a discipline matter

In this case, a Professional Responsibility Board (PRB) hearing panel determined that respondent violated three ethical rules in handling certain estate planning matters on behalf of an elderly client. It imposed a five-month suspension as a sanction. The Court ordered review of this decision on its own motion. We agree with the panel that respondent violated the rules in question but conclude that a one-year suspension is appropriate given the totality of circumstances.

The facts

In February 2015, respondent was contacted by J.M., who respondent had represented in real estate matters twenty to thirty years earlier. J.M. told respondent he was helping his elderly mother, E.M., transfer title to her home and wanted to avoid probate. Respondent knew that at the time, E.M. was ninety-one years old and living in her own home in Burlington with J.M. Respondent also knew that E.M.’s two daughters visited her regularly. Without communicating directly with E.M., respondent agreed to represent her and prepare documents transferring her home to a joint tenancy with right of survivorship to J.M., despite knowing that such a transfer might affect E.M.’s eligibility for Medicaid. Respondent never discussed this issue with E.M. and relied on representations by J.M. as to E.M.’s wishes. He prepared a deed and sent it to J.M. only.

He met with son and mother in a supermarket parking lot and provided a brief explanation of the document. He asked if she wished to sign it and she said “yes”

He never engaged her in conversation or asked her questions to which more than a single word response of “yes” was required. He did not make even basic inquiry, such as asking her the names of her children, her health status, or asking her to summarize the nature and extent of her assets.

During this parking-lot meeting, J.M. produced two other documents that respondent had never seen. The first gave J.M. ownership of an account belonging to E.M. that contained approximately $14,000; the second established or modified a trust to make J.M. the beneficiary of E.M.’s major assets. With J.M. sitting in the car next to E.M. for most of the time, respondent notarized these two additional documents, attesting that E.M. understood the paperwork and that she was signing as her free act and deed.

He met with the son regularly but with the mother once again

Acting on J.M.’s instructions and without contacting E.M., respondent prepared a new deed and power of attorney. The parties again met in J.M.’s car, this time in a White River Junction parking lot. J.M. was present during the entire meeting, sitting next to E.M. Respondent did not ask E.M. if she understood the documents; he simply “explained what the document[s] did.” Respondent thought E.M. recognized him from the prior meeting because she smiled at him, but he did not ask E.M. if she remembered him. Again, respondent did not discuss with E.M. the possible adverse consequences, for Medicaid purposes, of transferring her property to J.M. Nor did he ask her about her long-term care plans or discuss alternatives to the transfer in question. Respondent followed J.M.’s instructions because J.M. was “insistent” that title to the house be transferred immediately, despite the potential adverse consequences for E.M.

A close encounter of the third time

J.M. called respondent asking about how to revoke a power of attorney. In late March 2016, J.M. came to respondent’s office with E.M. and asked him to notarize a document respondent had never seen. This document revoked E.M.’s 2009 durable power of attorney, which had appointed one of her daughters as her agent. E.M. said “yes” when respondent asked if this was her wish. J.M. was present throughout the meeting. Respondent did not engage in any conversation with E.M. to see if she understood how this series of documents had changed her estate plan and he did not obtain or review a copy of her prior estate-planning documents with her. This was respondent’s last meeting with E.M.

He sent two invoices to the son and one to the mother, received a $1,000 cash “gift” from J.M. that was not credited to E.M.’s account and 

Around the time of respondent’s final meeting with E.M., J.M. attempted to bar his sisters from visiting E.M. His sisters obtained an emergency temporary guardianship order and, through representation by counsel, successfully obtained orders in the probate division invalidating the various documents that respondent had prepared and notarized at J.M.’s direction.

The hearing panel in the bar case found that E.M. was incompetent throughout the relevant time period and “would not have been able to even minimally understand the legal documents she signed or the consequences thereof.”

The court

Respondent argues that the Vermont Rules of Professional Conduct impose no requirement to assess a client’s capacity and that the panel improperly established and held him to such a standard. He asserts that even if such a duty exists, he satisfied it. As a threshold matter, we explained above that the violations of Rules 1.1 and 1.4(b) were not founded on E.M.’s incapacity or respondent’s failure to recognize her incapacity. We hold that Rule 1.14(a) requires attorneys to assess for themselves a client’s capacity. However, we need not define in detail the contours of this responsibility because here respondent’s failure to recognize his client’s cognitive limitations stemmed from flagrant violations of other clear and elemental ethical duties.

Due process

To the extent respondent argues that he was deprived of due process or other rights because he did not realize that he had an ethical obligation to assess his client’s capacity, we are not persuaded. This amounts to an ignorance-of-the-law defense, which we have repeatedly rejected.

The court also rejected evidentiary challenges.

Sanction

The flagrance of respondent’s violations—the completeness of his failure to even attempt to maintain anything close to a normal attorney-client relationship with E.M. in the face of numerous suspicious circumstances—is magnified by E.M.’s particularly vulnerable state, respondent’s extensive experience in this area of the law and dealing with elderly clients, respondent’s lack of recognition of the gravity of these transgressions, the troubling circumstances under which he accepted a $1000 gift from J.M., and the significant harm respondent caused. Given all the circumstances, respondent poses a serious risk to potential future clients and public trust in the legal profession. “[T]he public is protected when sanctions are imposed that are commensurate with the nature and gravity of the violations and the intent with which they were committed.” Id. ¶ 58 (quotation omitted). Therefore, “ ‘[t]he appropriate sanction must be weighty enough to counter [the] serious risk[s]’ presented by such conduct.” Id. (quoting Bowen, 2021 VT 7, ¶ 50). Not for punishment, but to protect the public and maintain confidence in the bar, we conclude that a one-year suspension is appropriate

The hearing panel report is linked here. (Mike Frisch)