Iowa Supreme Court Attorney Disciplinary Bd. v. Murphy
| Decision Date | 22 July 2011 |
| Docket Number | No. 09–1745.,09–1745. |
| Citation | 800 N.W.2d 37 |
| Parties | IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD, Appellee,v.Richard J. MURPHY, Appellant. |
| Court | Iowa Supreme Court |
OPINION TEXT STARTS HERE
David L. Brown and Jay D. Grimes of Hansen, McClintock & Riley, Des Moines, for appellant.Charles L. Harrington and Elizabeth E. Quinlan, Des Moines, for appellee.CADY, Chief Justice.
This appeal comes from a report of a division of the Grievance Commission of the Supreme Court of Iowa. See Iowa Ct. R. 35.10. The Iowa Supreme Court Attorney Disciplinary Board alleged Richard J. Murphy violated ethical rules when representing his wife in her capacity as conservator and guardian and in representing the seller and buyer in the sale of the ward's home.
The grievance commission found Murphy violated the Iowa Code of Professional Responsibility for Lawyers and recommended he be publicly reprimanded. Upon our review, we find Murphy committed several serious ethical violations and suspend him from the practice of law for a period of eighteen months.
Richard J. Murphy was admitted to practice law in Iowa in 1964. He moved to Osceola with his wife, Patricia, and began his practice. Murphy and Patricia raised three children, including Thomas Murphy, who now practices law with Murphy. Murphy primarily practices in the areas of real estate, probate, and tax. On occasions, Patricia worked as a secretary in Murphy's law office. During his forty-five-year career, Murphy has been active in civic groups such as Rotary Club and the Jaycees. He has never been disciplined.
Murphy served as the Clarke County Attorney at the beginning of his career. While serving in this capacity, Murphy became acquainted with Helen Doss, who was the Clarke County Auditor. Murphy eventually became Doss's personal attorney and periodically performed various legal services for her. Murphy's family, including Patricia, became personal friends with Doss. Doss was widowed with no children, and it became well known in the community that Doss, over time, relied on Patricia to assist her with her needs.
At some point, Doss also began to include Patricia and Murphy in her financial planning. In 1992, she named Murphy as the beneficiary of her life insurance policy. She also named Patricia as a co-owner of an account she maintained at Great Western Bank. Murphy assisted in the transaction by driving Doss to the bank where she signed documents to establish the joint ownership. Doss also named Murphy as a joint owner of a certificate of deposit she maintained at Union Planters Bank.
In late July 2000, Murphy prepared and filed a voluntary petition for appointment of a guardian and conservator for Doss. Doss was ninety-two years old at the time and had fallen several times in her home. Consequently, Doss agreed to move from her home into an extended care unit at the county hospital. After Doss moved into the care unit, she began to exhibit signs of dementia. Doss acknowledged in the petition for appointment of guardian and conservatorship that she was “unable to care for [her] personal safety or to ... provide for [her] necessities ... and [was] unable to make, communicate, or carry out important decisions concerning [her] financial affairs.”
The district court entered an order appointing Patricia as the guardian and conservator of Doss. Murphy was designated as the attorney for Patricia.
After the conservatorship and guardianship was opened, Doss continued to include the Murphys in her estate planning. This was generally done by continuing to make Patricia a joint owner of her financial accounts and by making gifts to Patricia and Murphy.
In February 2001, Doss directed Brenton Bank by written correspondence to remove the name of a relative as co-owner of two certificates of deposit maintained at the bank and to substitute Patricia as co-owner. Murphy had a telephone conversation with a person at the bank the day before Doss signed the letter requesting the change.
Two days later, Doss signed a letter addressed to Patricia directing her to sell the E-bonds she owned and to reinvest the proceeds in interest-bearing accounts payable to Patricia upon her death. As before, this letter was prepared for Doss to sign. Murphy then referred Patricia to a representative of A.G. Edwards & Sons, Inc. The E-bonds were redeemed for $125,840.71 and the proceeds were placed in an A.G. Edwards joint account with Patricia a short time later. Patricia paid the taxes on the transactions with the funds from another bank account held by Doss.
During this same time period, Murphy prepared a testamentary will for Doss. It was signed by her on March 5, 2001, and designated Patricia as the executor. This will left the bulk of her property to her nieces and nephews. Murphy had prepared a living will for Doss in 1988 and a testamentary will for Doss in 1991. In August 2000, just after Doss was admitted to the extended care unit, Murphy prepared a codicil to the 1991 will, substituting Patricia as the executor under the will.
Doss also maintained two bank accounts with Clarke County State Bank. Once the conservatorship and guardianship was established, Murphy only considered one of the two accounts at Clarke County State Bank to be an account of the conservatorship, and he only disclosed the activities of that account in the annual conservatorship report. Murphy considered the second account to be the personal account of Doss and did not disclose the account activities in the annual conservatorship report. Doss and Patricia wrote checks drawn on the undisclosed account for a variety of reasons, including cash gifts to Patricia, Murphy, Care Center employees, and Doss. On one occasion, the account funds were used to purchase a vacuum cleaner for the Murphys at a cost of $1427.96. Checks from the account were often made payable to Murphy and Patricia in increments of $500 or $1000.
Murphy filed annual conservatorship reports with the court during the period of the conservatorship proceedings, but failed to disclose any of the transactions involving the transfer of property to Patricia or himself. In addition to failing to disclose the account activities in one of the two accounts with Clarke County State Bank, Murphy failed to disclose the joint ownership of the A.G. Edwards account. He reported the sale of the E-bonds, but did not disclose that his wife became a co-owner of the proceeds. Similarly, Murphy did not reveal Patricia as the substitute co-owner of the CDs at Brenton Bank. Likewise, Murphy failed to disclose in the annual reports filed with the court that Patricia was a joint owner on the accounts maintained with Great Western Bank and Union Planters Bank. He never sought court approval before transferring property or making gifts.
In 2002, Doss sold her residence. Murphy's son and law partner, Thomas, provided legal services to the buyer of the home by examining the abstract and preparing a title opinion of the buyer. Murphy provided the legal services and advice to Patricia in the real estate transaction. On appeal, Murphy asserts he was unaware his son provided legal services to the buyer.
Doss died on September 18, 2004. She was ninety-six years old at the time. Her last will and testament was the will signed on March 5, 2001. It made a single specific bequest to St. Jude's Hospital for $10,000 and left the remainder of the estate to her nieces and nephews in equal shares. Murphy filed a petition to probate the will. The court appointed Patricia executor, and Murphy was designated as the attorney for the executor. There were five nieces and nephews who would share in the estate, including Harley D. Reed.
Murphy made a claim for benefits under the life insurance policy in October 2004. He was surprised to learn he had been designated as a beneficiary.
In November 2004, Murphy sent the beneficiaries a copy of the will, but failed to include the second page showing Patricia had been designated as the executor. In March 2005, Murphy filed the required report and inventory of the estate with the district court. The total value of the estate was $667,783.36. The schedule of joint tenancy property listed Patricia as a joint tenant of numerous accounts totaling approximately $240,000. Murphy was listed as a joint tenant of the Union Trust Bank account valued at approximately $36,000. The report and inventory failed to identify the life insurance policy naming Murphy as the beneficiary.
Reed subsequently contacted Murphy about the estate and the probate proceedings. He requested a copy of the report and inventory from Murphy. Murphy eventually responded by providing him a copy of the report and inventory, but failed to include the schedules of the report identifying the amount of the gross estate and property held in joint tenancy. Reed eventually learned of the gross value of the estate from the clerk of court.
Once Reed discovered the extent of the property that was subject to co-ownership by the Murphys, the residual beneficiaries contacted an attorney to investigate the matter. Following lengthy negotiations, the Murphys and the beneficiaries entered into a settlement agreement. The agreement required the Murphys to restore specific funds to the estate.
The board eventually filed a complaint against Murphy alleging unethical conduct. The board claimed Murphy's conduct in the Doss estate matter violated Iowa Code of Professional Responsibility for Lawyers DR 1–102(A)(1) (); DR 1–102(A)(3) (); DR 1–102(A)(4) (); DR 1–102(A)(5) (); DR 1–102(A)(6) (...
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