In re Disciplinary Proceeding Eugster

• Decision Date: 11 June 2009
• Docket Number: No. 200,568-3.,200,568-3.
• Citation: 166 Wn.2d 293,209 P.3d 435
• Parties: In the Matter of the DISCIPLINARY PROCEEDING AGAINST Stephen K. EUGSTER, an attorney at law.
• Court: Washington Supreme Court

209 P.3d 435

166 Wn.2d 293

In the Matter of the DISCIPLINARY PROCEEDING AGAINST Stephen K. EUGSTER, an attorney at law.

No. 200,568-3.

Supreme Court of Washington, En Banc.

June 11, 2009.

Shawn Timothy Newman, Attorney at Law, Olympia, WA, Kris J. Sundberg, Law Office of Kris J. Sundberg, Mercer Island, WA, for Petitioner.

Jonathan Henry Burke, Washington State Bar Assoc., Seattle, WA, for Respondent.

CHAMBERS, J.

¶ 1 Stephen K. Eugster practiced law for 34 years without a history of discipline.¹ Then the Washington State Bar Association (WSBA) charged Eugster with nine counts of attorney misconduct based on Eugster's filing a guardianship petition against his former client without any investigation as to her alleged incompetency and failing to abide by the objectives of the representation. The hearing officer and Disciplinary Board of the Washington State Bar Association (Board) concluded Eugster violated eight current and former Rules of Professional Conduct (RPC). The hearing officer recommended disbarment. A unanimous Board agreed but amended several of the hearing officer's findings of fact.

¶ 2 Eugster challenges 12 findings of fact. He also argues the Board erred in recommending disbarment because his actions were defensible under former RPC 1.13 (1985) and because the Board ignored mitigating factors that would lessen his sanction. The WSBA argues the court should affirm the findings of fact and conclusions of law and disbar Eugster. We conclude that Eugster's misconduct does not merit disbarment but suspend him for 18 months and impose additional conditions.

FACTS

¶ 3 Due to the way this case has been framed, we find it necessary to discuss the facts in some detail in order to properly resolve the issues presented. Marion Stead hired Eugster in June 2004. When Mrs. Stead contacted Eugster, she was 87 and had recently moved into the Parkview Assisted Living Facility after the death of her husband, John. This was not the first time Eugster worked for the Stead family. In the early 1990s, Eugster represented Mrs. Stead's only child, Roger Samuels,² in the dissolution of his marriage. According to the evidence submitted by the WSBA, Mrs. Stead's objective in contacting Eugster in June 2004 was to remove Roger from his position of control over her affairs and to assist her with estate planning.

¶ 4 In 2003, before John's death, the Steads had executed new wills drafted by attorney David Hellenthal. Under the Hellenthal wills, Roger would inherit the Stead home and his daughter, Emilie, would be the beneficiary of a residual trust. The Hellenthal wills also created a supplemental needs trust for the surviving spouse and named Roger as trustee. As trustee of the supplemental needs trust, Roger had discretion to make or withhold payments so long as it did not disqualify Mrs. Stead from any other assistance. The wills specified the trust was irrevocable and could not, absent a court order, be changed.

¶ 5 In late 2003, dissatisfied with the Hellenthal wills, Mrs. Stead contacted attorney Summer Stahl. Stahl changed the beneficiary of a life insurance policy from Roger back to Mrs. Stead but performed no other services. When Roger discovered that Mrs. Stead had hired Stahl, he became "very upset." Amended Findings of Fact (AFOF) 2.14.1. Roger saw his mother's consultations with Stahl as a betrayal of family trust and questioned her competence. In January 2004, Roger had Dr. Duane Green, a psychologist, examine his mother for testamentary capacity. Dr. Green noted an "`interpersonal issue between Ms. Stead and her son'" and generally observed that she seemed "`"desperate," as she had no access to funds.'" Resp't's Ex. 88, at 17 (quoting Dr. Green). Dr. Green concluded Mrs. Stead was upset over the illness of her husband but had testamentary capacity.

¶ 6 Upon John's death in February 2004, Roger became the personal representative of John's estate and acted as trustee of the supplemental needs trust for the benefit of Mrs. Stead. Roger also assumed control over the payment of bills because he did not believe his mother was capable of doing so. During this time the relationship between Roger and his mother continued to deteriorate. From the record it appears that Mrs. Stead felt Roger was manipulating her estate and denying her adequate funds so that he could preserve more for himself and his daughter after her death. In particular, Mrs. Stead felt that she had an adequate estate and did not like the idea of being forced to receive Medicaid benefits and not being permitted to have sufficient spending money. Mrs. Stead and her son's relationship became even more strained as Roger continued to refuse her requests for money. Mrs. Stead hoped removing her son from authority over her affairs would help mend their relationship.

¶ 7 In June 2004, Mrs. Stead hired Eugster to "short circuit" Roger's control over her affairs and also to retrieve certain items of personal property from Roger. Eugster had Mrs. Stead revise her estate planning scheme by creating a revocable living trust for her and recommending that she be her own trustee. On June 30, 2004, Eugster wrote to Mrs. Stead saying, "It would be my recommendation that if you like the estate plan which I have drafted for you, that you continue as the trustee of your estate with perhaps help and direction from me." Resp't's Ex. 33. Mrs. Stead was named the trustee with Eugster serving as successor trustee and Roger as secondary successor trustee. To protect Mrs. Stead consistent with the existing testamentary trust and consistent with her desire that Roger not control her finances, Eugster was given power of attorney both generally and for health care. Eugster contends he reluctantly agreed to so serve as representative and successor trustee after expressing concerns in a letter to Mrs. Stead. Roger served as successor to Eugster in both roles. Eugster testified that installing Roger as second successor trustee enabled Eugster to monitor Roger and prevent him from doing anything untoward against Mrs. Stead's estate without going through Eugster.

¶ 8 In July 2004, Eugster met with Roger to discuss the supplemental needs trust created by John's will. He also consulted with Mrs. Stead's financial planner regarding her suspicion that the supplemental needs trust was overfunded.³ Eugster made preparations to sell the Stead family home. As to recovering Mrs. Stead's personal property, Eugster located the items she requested but assured her by letter that Roger was keeping them safe. In August, Eugster wrote Mrs. Stead to assure her of Roger's good intentions toward her and recommended Roger resume control over her affairs:

Roger has been a good and dutiful son to you. I have to be honest about this. You can be proud of Roger. He is not acting to protect himself or to take things from you. He has been acting to ensure that you are taken care of, your bills are paid, your assets are protected, and that you do not have to have unwanted concerns for your welfare as you grow older.

Frankly, you should be very proud of Roger.

. . . .

But, I think you should give serious thought to making Roger the successor trustee to your Trust and the person holding your power of attorney.

Resp't's Ex. 52, at 2-3.

¶ 9 In September 2004, Mrs. Stead received another letter from Eugster, suggesting the two of them meet and include Roger. Although Mrs. Stead did not communicate her displeasure to Eugster, it is clear from the record that she was not happy with his response. She responded by seeking the counsel of another attorney, Andrew Braff, who testified that Mrs. Stead wanted to know whether Eugster was representing her or Roger. On September 9, 2004, Braff wrote Eugster notifying him that Braff now represented Mrs. Stead and explicitly revoking Eugster's power of attorney. Eugster responded on September 13, 2004, by letter stating:

I do not believe that Marion R. Stead is competent. A guardianship should be established for her person and her estate or at least her es[t]ate. Please be advised that I do not recognize that you have been retained to represent her or that the revocation of power of attorney is effective.

Resp't's Ex. 59. Braff then sent a letter dated September 17, 2004, informing Eugster that his "services as Marion Stead's attorney are terminated, and Mrs. Stead wants her files forwarded to this office." Resp't's Ex. 60. In addition, the letter stated "Marion Stead fully expects any and all communications with you to remain confidential and not to be passed on to Roger Samuels." Id. Braff also asked Eugster to advise him of any changes in Marion's competence since the execution of her trust in July where witnesses testified she was of sound mind. Around the same time, Mrs. Stead removed Eugster as successor trustee of her trust and named Stephen Trefts, doing business as Northwest Trustee and Management Services instead.

¶ 10 Eugster states that he believed Mrs. Stead to be a vulnerable senior and that he decided to take action when he learned that Mrs. Stead had hired Trefts. Under the durable general power of attorney prepared by Braff, Northwest Trustee and Management Services was entitled to reimbursement for all costs and expenses and "shall be entitled to receive at least annually, without court approval, reasonable compensation for services performed on the principal's behalf." Resp't's Ex. 58, at 4 (emphasis added). On October 8, 2004, Trefts informed Roger that Mrs. Stead had resigned as trustee and had named Trefts as successor. Braff and Trefts also attempted to get Roger, as trustee of John Stead's Testamentary trust, to pay $2,000 per month to them for "one-half of her support."⁴ Board Ex. 55. Eugster deemed the requested payment improper under the special needs trust.⁵

¶ 11 On September 27, 2004, Eugster petitioned the court to appoint a guardian for Mrs. Stead. Eugster filed the guardianship action pursuant to former RPC 1.13, which...