Office of Disciplinary Counsel v. Sanderson
| Docket Number | 156 DB 2023 |
| Decision Date | 24 April 2024 |
| Parties | OFFICE OF DISCIPLINARY COUNSEL Petitioner v. JOHN PATRICK SANDERSON, III Respondent |
| Court | Pennsylvania Supreme Court |
1
OFFICE OF DISCIPLINARY COUNSEL Petitioner
v.
JOHN PATRICK SANDERSON, III Respondent
No. 156 DB 2023
Supreme Court of Pennsylvania
April 24, 2024
Attorney Registration No. 207597 (Lackawanna County)
ORDER
AND NOW, this 24th day of April, 2024, in accordance with Rule 215(g), Pa.R.D.E., the three-member Panel of the Disciplinary Board having reviewed and approved the Joint Petition in Support of Discipline on Consent filed in the above captioned matter; it is
ORDERED that JOHN PATRICK SANDERSON, III, be subjected to a PUBLIC REPRIMAND by the Disciplinary Board of the Supreme Court of Pennsylvania as provided in Rule 204(a) and Rule 205(c)(9) of the Pennsylvania Rules of Disciplinary Enforcement.
JOINT PETITION IN SUPPORT OF DISCIPLINE ON CONSENT PURSUANT TO Pa.R.D.E. 215(d)
Petitioner, the Office of Disciplinary Counsel ("ODC"), by Thomas J. Farrell, Chief Disciplinary Counsel, and Jennifer E. Tobias, Disciplinary Counsel, and John Patrick Sanderson, III, Esquire ("Respondent"), by and through his counsel, Paul C. Troy, Esquire, respectfully petition the Disciplinary Board of the Supreme Court of Pennsylvania in support of discipline on consent, pursuant to Pennsylvania Rule of Disciplinary Enforcement ("Pa.R.D.E.'') 215(d), and in support thereof state:
1. ODC, whose principal office is situated at Office of Chief Disciplinary Counsel, Pennsylvania Judicial Center, 601 Commonwealth Avenue, Suite 2700, P.O. Box 62485, Harrisburg, Pennsylvania 17106, is invested, pursuant to Pa.R.D.E. 207, with the power and duty to investigate all matters involving alleged misconduct of an attorney admitted to practice law in the Commonwealth of Pennsylvania and to prosecute all disciplinary proceedings brought in accordance with the various provisions of the aforesaid Enforcement Rules.
2. Respondent was admitted to practice law in the Commonwealth of Pennsylvania on April 14, 2008. Respondent is on active status, and maintains his office at 1 Terrace Drive, Olyphant, PA 18447 in Lackawanna County, Pennsylvania.
3. Respondent is subject to the disciplinary jurisdiction of the Disciplinary Board of the Supreme Court of Pennsylvania.
SPECIFIC FACTUAL ALLEGATIONS ADMITTED
4. On March 18, 2015, Timothy Bach ("Decedent") retained Respondent and his law firm, the Sanderson Law Firm, to draft estate planning documents including a last will and testament ("Will"), and an irrevocable personal residence trust ("Residence Trust").
5. Respondent and the Sanderson Law Firm were paid $1,845 for their services in drafting the estate documents.
6. The Sanderson Law Firm is owned by Respondent, Respondent's brother, Scott Sanderson, Esquire, and Respondent's father, John Sanderson, Jr., Esquire.
7. Decedent's Will directed his personal property to the care of his sister, for distribution as she desired.
8. Decedent's Will made two specific bequests in the amounts of $20,000 to Camp Victory, and $5,000 to Jonestown United Methodist Church.
9. Decedent's Will bequeathed his two vehicles to individual beneficiaries.
10. Decedent's Will contained a residual clause that provided for the remainder of the estate to pour over to a Revocable Trust, created March 18,2015, with five charities named beneficiaries.
11. The Revocable Trust contemplated a 3-year trust administration.
12. The Residence Trust named four beneficiaries: Decedent's three nieces ("Niece beneficiaries") and a friend, Daniel Elliott.
13. The estate documents named Respondent Executor to the Estate and Successor Trustee to the Residence Trust.
14. The Will contemplates that Respondent's law firm will assist with estate administration.
15. Decedent died on April 9, 2018.
16. Respondent applied to the Register of Wills, Luzerne County, for Letters Testamentary, which were granted on April 20, 2018, and estate file no. 4018-1645 was opened ("Estate").
17. After Letters of Administration were granted, Respondent executed fee agreements to pay:
a. a flat fee of $25,000 to Respondent, for his work as Executor of Decedent's estate
b. a flat fee of $25,000 his brother, Scott Sanderson, and the Sanderson Law Firm for work as attorney for the Executor;
c. a fee equal to 22.7% of the gross real estate sale price of Decedent's residence and any other asset held by the Residence Trust to Respondent, as Trustee of the Residence Trust; and
d. a fee equal to 22.7% of the gross real estate sale price of Decedent's residence and any other asset held by the Residence Trust to Respondent's brother, Scott Sanderson, and the Sanderson Law Firm, for work as attorney for the Trustee.
Estate of Timothy Bach
18. On May 4, 2018, Respondent, as Executor, opened an estate checking account and made an initial deposit of $161,990.10.
19. The initial deposit came from liquidation of two accounts in the amounts of $70,597.10 (American General Life) and $87,443 (Delaware Life), and $3,950 cash.
20. On or about May 4, 2018, Respondent issued checks, drawn on the Estate checking account in the following amounts to the following payees:
a. $15,000 to himself for "Executor Fee Installment #1";
b. $15,000 to the Sanderson Law Firm for "Installment #1" for the role of Attorney for the estate; and
c. $1,245.86 to Sanderson Law Firm for "Reimbursements for Estate Matter", which included reimbursement for gasoline for two vehicles totaling $270 from 4/9/18 through 5/5/18.
21. On or about May 4, 2018, Respondent also issued checks to third parties for "clean up" and "financial advisor services" in the following amounts to the following payees:
a. $3,221.75 to Don Pettinato, for "Invoice for clean up of personal property"; and
b. $3,857.75 to Kelli Stevens for, inter alia inventorying perishable and nonperishable foods, purchasing supplies to box and wrap, bringing helpers to assist on several weekends, renting an enclosed trailer, inventorying clothing and delivering donated items to church, and for financial advisor services.
22. On the following dates in the following amounts, Respondent issued checks, drawn on the Estate checking account, to himself for "reimbursement for storage unit" and "reimbursement for storage garage and rent":
a. $180.04 on May 16, 2018;
b. $136.69 on June 14,2018; and
c. $136.69 on July 18, 2018.
23. On July 2, 2018, Respondent issued checks, drawn on the Estate checking account, in the following amounts to the following payees:
a. $10,000 to himself, for Executor Fee (second installment);
b. $10,000 to the Sanderson Law Firm for Attorney Fee (second installment);
c. $329.00 to the Sanderson Law Firm for "reimbursement", including gasoline reimbursement of $294.00 for two vehicles from 5/6/18 through 7/2/18; and
d. $5,000 to the Sanderson Law Firm for "March 26, 2018 invoice".
24. The $5,000 paid to the Sanderson Law Firm for the "March 26, 2018 invoice" was for services allegedly rendered by the firm to Decedent prior to Decedent's death, investigating a potential medical malpractice matter.
25. On July 22,2018, Respondent issued checks, drawn on the Estate checking account, in the following amounts to the following payees:
a. $1,000 to Kimberly Sanderson, Scott Sanderson's wife, for "property cleanup of personal property"; and
b. $1,500 to Amanda Misencik for "property cleanup of personal property".
26. On July 29,2018, Respondent issued checks, drawn on the Estate checking account, in the following amounts to the following payees:
a. $500 to himself for "final house clean up and P.P. clean up";
b. $500 to Scott Sanderson for "final house clean up and P.P. clean up";
c. $850 to Kimberly Sanderson, Scott Sanderson's wife, for "final house clean up and P.P. clean up"; and
d. $850 to Amanda Misencik for "final house clean up and P.P. clean up".
27. Between April 2018 and October 2018, Respondent made payments from the Estate account for administrative fees and costs, Decedent's debts, and related expenses totaling $3,964.25.
28. On or about October 3, 2018, Respondent filed with Luzerne County Register of Wills a Rev-1500 Inheritance Tax Return.
29. According to the Rev-1500, Decedent's Gross Assets totaled $297,342.67.
30. Decedent's Gross Assets included Cash, Bank Deposits and Miscellaneous personal property in the amount of $205,094.46, and non-probate property totaling $92,248.21.
31. As of October 3, 2018, Respondent had issued checks had issued checks to himself drawn on the Estate account totaling $25,95342.
32. As of October 3, 2018, Respondent had issued checks to Scott Sanderson and/or the Sanderson Law Firm drawn on the Estate account totaling $32,074.86.
33. In Pennsylvania, both executor fees and attorney's fees in estate matters should be reasonable and just, and based on the actual value of service provided.
34. A schedule of percentages outlined in In re Johnson's Estate, 4 Fid. Rep.2d 6, 8 (O.C.Del.Co 1983) is commonly used both by practitioners and the courts as guidance in determining appropriate attorney's fees and executor commissions; these percentages are generally found by courts to be fair and reasonable.
35. The Attorney and Executor fees are in excess of that which would be calculated based on the Johnson Estate, and are excessive given the relatively simple administration involved in this estate.
36. Respondent did not include Decedent's personal residence located in Shickshinny, PA, with an estimated value of $320,000 on the initial Rev-1500 because, he believed, the asset was not part of Decedent's Gross Assets.
37. On or about January 30, 2019, Respondent issued checks drawn on the Estate checking account, in the following amounts to the following payees, consistent with specific bequests in Decedent's Will:
a. $20,000 to Camp Victory; and
b. $5,000 to...
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