In re Gardner
| Decision Date | 15 January 2019 |
| Docket Number | No. SC 97207,SC 97207 |
| Citation | 565 S.W.3d 670 |
| Parties | IN RE: R. Scott GARDNER, Respondent. |
| Court | Missouri Supreme Court |
Chief Disciplinary Counsel Alan D. Pratzel and Carl E. Schaeperkoetter represented the chief disciplinary counsel’s office in Jefferson City, (573) 635-7400.
Gardner was represented by Sara Rittman of Rittman Law LLC in Jefferson City, (573) 584-9347.
Section 473.153,1 governing payment of personal representative fees, requires personal representatives to obtain prior approval from the probate division to be paid all or part of their personal representative fees before final settlement. Here, the probate division approved early payment of only part of R. Scott Gardner’s personal representative fee request and specifically directed the remainder of his fees would be paid only at final settlement. Mr. Gardner nonetheless paid himself most of the remainder of his fees prior to final settlement, in violation of the circuit court’s order and the relevant statute. This violation was made worse when Mr. Gardner failed to inform the court of his payments to himself prior to or even in the final settlement. His conduct was knowing and, considered without regard to mitigating factors, would merit suspension. That he was actually entitled to the fees, there was no harm to the estate, and he had no dishonest motive but rather incorrectly believed local practice would permit his conduct despite the rule and statute do not lessen the violations but serve to mitigate the discipline imposed. Also mitigating are Mr. Gardner’s remorse, good character, and lack of significant disciplinary history. This Court, therefore, imposes an indefinite suspension with no leave to reapply for six months, but stays the suspension and places Mr. Gardner on probation for one year under conditions set by this Court.
R. Scott Gardner was admitted to practice in Missouri in 1983. After licensure, Mr. Gardner began practicing at his family law firm in Sedalia. Currently, he is a solo practitioner. He has maintained a significant probate practice since 1988 but has been a personal representative on only a few occasions. In 2014, Mr. Gardner was appointed as personal representative for the estate of Ethel M. Hall, which was pending in the probate division of the Pettis County circuit court.
The estate was under supervised administration.2 On February 18, 2015, Mr. Gardner submitted an amended motion requesting payment of a partial fee of $30,070 pursuant to section 473.153. The circuit court first issued an order overruling the motion:
The Court considers the motion for approval of partial payment of fees. The motion is denied for two reasons. The first is that the motion asks for 5% of total reimbursements which exceeds the amount authorized by § 473.153 RSMo. Secondly, receiving a fee when an estate closes is a powerful incentive to encourage a PR to get the estate closed. Were the Court to authorize early payments of partial fees, this incentive would be lost. This Court desires to keep this incentive in place.
Later the same day, the court issued a second order permitting payment of almost half of the requested fee:
The Court considers the amended petition for fees. The personal representative is authorized to pay himself an advance personal representative fee in the amount of $15,000.00. This amount shall be deducted from the final calculation of fees due him at the close of the estate.
Mr. Gardner paid himself the $15,000 permitted by the court’s order.
On or about June 25, 2015, Mr. Gardner wrote a second check to himself from the estate account in the amount of $15,466. The parties agree this would have been the remainder of the fee to which he would have been entitled once the estate was settled. He deposited the money into his law firm account. Despite the circuit court’s prior order stating the final calculation of the remainder of Mr. Gardner’s fee would occur "at the close of the estate," Mr. Gardner did not file a final settlement or otherwise seek to close the estate at the time he paid himself the remainder of his fee. Neither did he file a written motion asking for approval of early payment of the remainder of his fee.
Mr. Gardner later testified he acted without court approval and in advance of the final settlement because, after talking to the estate’s accountant, he concluded the estate could avoid certain income taxes if it paid out all claims and fees and finally settled the estate before what he then believed was the end of the tax year on June 30, 2015. In fact, however, he failed to settle the estate by the end of June after he got caught up in preparing for a July trial in another matter. Mr. Gardner nonetheless had paid himself his final fee without informing the court he had done so, and he did so at a time and in a manner inconsistent with the court’s prior order.3
Mr. Gardner testified he realized he needed to let the court know what had happened and so went by the judge’s office without a prior appointment on a couple of occasions but did not locate the judge on those visits. He said he continued to go by the judge’s office during the following Fourth of July holiday week but also was unsuccessful in seeing the judge. So far as the record shows, Mr. Gardner did not attempt either to call the court to inform the judge orally what he had done or to set an appointment to see the judge, nor did he file a written motion for after-the-fact approval of the payment. He then forgot about the fee issue in the press of other business and did not follow up further.
Mr. Gardner filed his final settlement of the estate two months later, on September 3, 2015. The final settlement includes a spreadsheet showing the assets, debits, and credits of the estate, fees paid to the personal representative, and the distributions to the estate beneficiaries. In the final settlement spreadsheet, Mr. Gardner listed the correct total amount of fees due to him, $32,604. He also noted $15,000 of this fee already had been paid to him on February 26, 2015, but he did not note he had disbursed to himself the remainder of the fee in June 2015 as well. Attached to this final settlement, however, Mr. Gardner included bank records of disbursements from the estate that did show the June 2015 payment to himself of $15,466.
On September 10, 2015, upon reviewing the filing and attachments, the circuit court discovered the advance payment and ordered Mr. Gardner to appear on September 15, 2015, to show cause why he should not be held in contempt and removed as personal representative in light of his early advance payment to himself without court permission and in violation of the court’s order. Mr. Gardner then went to the judge’s office and spoke with him about the early payment, and the circuit court canceled the hearing.
The next day, Mr. Gardner finally submitted a motion requesting approval to pay himself the total personal representative fee. The circuit court nonetheless issued a contempt order on September 14, 2015, and reduced Mr. Gardner’s fee by $2,138. The following month, however, the circuit court set aside this contempt order and entered a revised order directing Mr. Gardner to restore the $15,466 he had paid himself the prior June and appear before the court to address his removal as personal representative.4
On March 21, 2017, the circuit court appointed a different attorney as successor personal representative. The successor personal representative and Mr. Gardner entered into a stipulation for the payment of personal representative fees for the estate, which the court approved. Under the stipulation, the successor personal representative received $2,500 and Mr. Gardner received $15,105.
The judge later testified Mr. Gardner apologized during their conversation and asked for permission to file a revised petition for fees. The judge also testified he had no issue with the amount of the fee and did not believe Mr. Gardner was trying to be paid twice. Instead, the judge was concerned with the length of the delay between the time Mr. Gardner advanced the rest of his fee to himself and the time Mr. Gardner filed the final settlement. The judge acknowledged attorneys occasionally disburse fees to themselves just before filing the final settlement, and Mr. Gardner said at the time he was planning to close the estate within a few days. But, the judge testified, that is not what happened here:
The way it works is, when the attorney files the final settlement, usually, that subsection right there describes the fees they're proposing, and so I authorize it, but I never actually look and see whether the proposed check to themselves is actually -- was cashed the day before or the week before. When it’s right around the final settlement, I just assume that’s the reasonable protocol. It was only because this was several months earlier that caused me concern.
The judge later testified he believed Mr. Gardner’s reduction in fees was a "fair resolution of the personal representative fee issue." The judge also testified he thought Mr. Gardner was a good man who worked to make a difference in his community.
On September 29, 2017, OCDC filed an information alleging Mr. Gardner had committed professional misconduct in violation of Rule 4-1.15 (); Rule 4-3.3 (); Rule 4-3.4(c) (); Rule 4-8.4(c) ().
Mr. Gardner testified it was his firm’s practice to file an application for court approval before paying out fees from an estate. Mr. Gardner also acknowledged he made a mistake when he failed to list the payment on the final settlement spreadsheet. Mr. Gardner said this occurred because he had prepared the draft of the...
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