MATTER OF NELSON, 81-1371.
| Citation | 327 NW 2d 576 |
| Decision Date | 13 January 1983 |
| Docket Number | No. 81-1371.,81-1371. |
| Parties | In the Matter of the Petition for Disciplinary Action against James J. NELSON, a Minnesota Lawyer. |
| Court | Minnesota Supreme Court |
Michael J. Hoover, Director Lawyers Professional Responsibility, and William J. Wernz, St. Paul, for appellant.
James J. Nelson, Minneapolis, pro se.
Heard, considered and decided by the court en banc.
The Lawyers Professional Responsibility Board filed a complaint against respondent, James J. Nelson, an attorney in this state, which charged him with several violations of the Code of Professional Responsibility. This court appointed the Honorable Glen W. Swenson, Judge of Wright County Court, to act as referee and hear the petition for discipline. A hearing was held on June 28 and 29, 1982, on the allegations of the December 24, 1981, petition.
On July 30, 1982, Referee Swenson made findings of fact, conclusions of law and recommended that respondent be suspended for six months and severely reprimanded.
This matter was heard before this court sitting en banc on November 1, 1982. The Director of the Lawyers Professional Responsibility Board was represented. The respondent did not appear. He waived his right to oral argument in his brief. No transcript of the June 28 and 29, 1982, hearing before Referee Swenson was ordered by either respondent or the Director of Lawyers Professional Responsibility; therefore, pursuant to Rule 14(d) of the Rules on Lawyers Professional Responsibility (1982), the findings of fact and conclusions of the referee are deemed conclusive.
Based upon the referee's findings we learn the following: Respondent James J. Nelson has been licensed to practice law in Minnesota since October 16, 1968. He has served as officer or chairman of several community organizations. He was appointed by the Minneapolis City Council to the Truth in Housing Commission, and presently serves as its vice-president. He was elected to the Board of Directors of the Minneapolis Chapter of the Audubon Society, and presently chairs a committee to create the first Photographic Nature Sanctuary in Minnesota. He taught real estate law for two years and is presently working out of his home on a major lecture series for National Audubon Wildlife Films.
The petition for disciplinary action filed against respondent alleged six counts of unprofessional conduct. Four of those counts originated from respondent's representation of the estates of Oscar and Olive Hartz.
Respondent drafted a Will and Trust for Oscar Hartz, who died on May 11, 1973. Mr. Hartz was survived by his wife, Olive Hartz, and a daughter, Mrs. Shirley Arms. Mrs. Arms was appointed personal representative of her father's estate. At the time of death Mr. Hartz possessed $108,920.90 in multi-party accounts, held jointly with Mrs. Arms and Mrs. Hartz.
Respondent represented to Mrs. Arms that she was not entitled to any share of the multi-party accounts. He did not advise her to retain her own counsel. Respondent advised Mrs. Hartz to transfer the bulk of said accounts to her own name solely. On November 7, 1980, after six days of trial, the Hennepin County Probate Court awarded Mrs. Arms $47,542.77 as her after-tax share of the joint accounts.
The referee concluded that respondent's failure to advise Mrs. Arms and Mrs. Hartz regarding Mrs. Arms' interests in the joint-tenancy bank accounts damaged his client and reflected adversely on his fitness to practice law, violating DR 1-102(A)(6) and DR 7-101(A)(3) of the Minnesota Code of Professional Responsibility.
On or about October 6, 1976, respondent arranged to borrow $15,984.60 from Mrs. Hartz to use as part of a settlement in his divorce proceedings. Olive and Oscar Hartz had been in the business of building and remodeling homes. Respondent purchased a home from Oscar Hartz in 1970 and financed the cost by a contract for deed. In connection with his loan from Mrs. Hartz in 1976, respondent revised the contract for deed to add the $15,984.60 to the principal. The revised contract was executed by respondent and Mrs. Hartz. Although the revised contract appears to obligate respondent to pay Mrs. Hartz $50,000, including $19,789.81 in cash, respondent claims that he was obligated to pay only $30,210.19 in monthly installments over 20 years.
Respondent admitted that he and Mrs. Hartz had differing interests with respect to the contract, but made no written disclosure to her of such interests or of the possible effects of them on his judgment on her behalf.
On November 7, 1977, Olive Hartz executed a Last Will and Testament drafted by respondent. Under Mrs. Hartz' will, respondent was appointed trustee over several trust accounts and was to "audit and enforce" conditions related to the receipt of certain payments. Among the payments to be made into the trust accounts were respondent's contract for deed payments on the house he had purchased from the Hartzes. Respondent was thus given the authority to monitor a trust into which his own contract for deed payments were to be made.
Respondent and Mrs. Arms had a dispute over attorney fees claimed by respondent for his work on the estate of Mrs. Hartz. Respondent did not make payments on the contract for deed for October, November and December, 1978, or January, February and March, 1979. Respondent made no written disclosures to Mrs. Hartz or Mrs. Arms of his differing interests regarding the contract for deed and the trust provisions of the will.
The referee concluded that respondent's drafting of a contract for deed for purchase of his home from his client, Mrs. Hartz, and his drafting of Mrs. Hartz' will with trust provisions making him monitor of his own payment obligations involved clear conflicts of interest that could not be waived after purported oral disclosures. The referee found that these conflicts violated DR 1-102(A)(6), DR 5-101(A), DR 5-104(A) and DR 5-105(A) of the Minnesota Code of Professional Responsibility.
After Mrs. Hartz' death on December 7, 1977, Mrs. Arms was appointed personal representative for probate of Mrs. Hartz' will. Respondent acted as attorney for the estate. On January 18, 1979, Mrs. Arms formally discharged respondent as attorney for the estate as a result of a dispute over his legal fees. Following his discharge, respondent reported alleged violations to tax authorities, the probate court, and the Minnesota Securities Division. The allegations involved the purported failure of Mrs. Arms as personal representative of her mother's estate to report certain lifetime transfers by Mrs. Hartz to Mrs. Arms and her family. The referee found that respondent made these allegations without a reasonable basis and in bad faith. The referee stated that "respondent reported these alleged transfers as facts when to his knowledge they were at best conjecture and at worst fabrication" and that respondent had attempted to use clients' confidences to their detriment and to his own advantage.
The referee concluded that respond...
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