California Dismisses Claims Against Lawyer Who Acted As Trustee for Elderly Client

It is a rare week when I do not read about the abuse of an elderly person by a lawyer – or by someone the lawyer created a power of attorney for. In the case of Drexel Andrew Bradshaw, 16-O-15558, the State Bar Court of California dismissed all charges against Bradshaw. This case is somewhat scary for lawyers because it should not have been brought at all. Bradshaw had to do a great deal of work to extricate himself from the wrongful charges. Indeed, he must have lost quite a bit of sleep as well.

Bradshaw was named as a trustee of a client’s trust. When the elderly client became incapacitated, Bradshaw obtained nursing care for the client and had repairs made to the client’s home. As Trustee, Bradshaw retained a contractor. Previously, Bradshaw had incorporated the contractor. Bradshaw had no ownership interest in the contractor. (If Bradshaw had been the owner of the contractor, retaining the contractor would have violated his fiduciary duty to the trust and his client and would have constituted self-dealing). Because he had no ownership interest in the contractor, there was no self-dealing.

The California State Bar believed that by retained a contractor who he had incorporated, Bradshaw had engaged in self-dealing and a conflict of interest. The hearing panel recommended disbarment. Bradshaw appealed.

On appeal, the Review Department dismissed all of the charges against Bradshaw.

The Review Opinion states:

Upon our independent review of the record (Cal. Rules of Court, rule 9.12), we do not find clear and convincing evidence to support culpability as to the charged misconduct. We reject OCTC’s premise that Bradshaw wanted to start a construction company and used his position as trustee to start his “corrupt” enterprise. Bradshaw served as the successor trustee for a client years after his firm drafted the client’s trust and estate plan, and only after the first two successor trustees were unable to serve. He managed the trust according to its stated purposes and terms in a reasonable and proper manner, including engaging a certified specialist in probate and trust law to assist him in his duties. Further, he adhered to his client’s clearly expressed desires to be cared for in her San Francisco home, and that the equity in the home be used to accomplish that goal. To that end, Bradshaw used the trust assets, which consisted mostly of the home’s $1.6 million equity, to provide his client with quality nursing care and for necessary repairs to ensure her safety in the home, which was built over 100 years ago. For most of the construction projects, Bradshaw hired Bay Construction, a licensed contracting company that he incorporated on behalf of Juan Gonzalez, the owner, who had previously done work for Bradshaw and to whom Bradshaw had provided other assistance in establishing the company. In total, the trust paid BayConstruction

$157,246.76 for various construction projects, including replacement of the back stairs and repair of the home’s foundation, all done competently and at fair market value.

The evidence in the record fails to establish that Bradshaw engaged in any of the acts as alleged by OCTC. Accordingly, we dismiss this proceeding with prejudice. (See In the Matter of Kroff (Review Dept. 1998) 3 Cal. State Bar Ct. Rptr. 838, 839 [dismissal of charges for want of proof after trial on merits is with prejudice].)

In other words, retaining a former client to do construction work on a home does not constitute a breach of trust or a breach of fiduciary duty. It concerns me that the California disciplinary authorities did not understand the significance of the fact that the lawyer had no ownership interest in the contractor. It is unfortunate that this case was brought at all.

Ed Clinton, Jr.

http://www.clintonlaw.net

The Bradshaw decision is located here: http://www.statebarcourt.ca.gov/Review-Department-Dispositions/Non-Published-Opinions

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