This past week, a story was published in the Detroit Free Press regarding a hotly contested case that is now before the Michigan Court of Appeals. As you read the story, it is easy to feel sympathy for the family of Bobby Mardigian who argued that his Will and Trust should be set aside. In fact, it is with this same sympathy that I believe Charlevoix County Probate Judge Frederick Mulhauser made his decision. As difficult as it may be, I ask that you read this article trying to refrain from allowing your sympathies to impact sound legal judgment. I will explain why I believe that the probate court judge made an incorrect decision.
Incorrect Decision: Here is what happened…
During his lifetime, Robert (Bobby) Mardigian accumulated a lot of wealth. In January 2012, he was 59 years old when he died of lung cancer at an Ann Arbor hospital. He was divorced with no children.
To protect his financial affairs, he hired his lawyer and long-time friend to draft his Will and Trust. When Mardigian died in 2012, his fortune was worth more than $17 million. His estate plan gifted his money to his lawyer and his lawyer’s two children. Yes, you read that correctly. The attorney that drafted Mardigian’s estate plan left Mardigian’s fortune primarily to himself and his two children!
Incorrect Decision: Violation of the Michigan’s Rules of Professional Conduct
The problem is, Mardigian wasn’t related to the attorney. The Michigan Rules of Professional Conduct are the rules governing the conduct of attorneys in Michigan. The Michigan Rules of Professional Conduct state that attorneys “shall not” prepare an estate plan for a non-related client that includes a substantial gift for the attorney.
Bobby’s brother Edward Mardigian, two of his nieces, and his girlfriend, all challenged the Will and Trust. They argued that the court should not enforce an estate plan that violates the public policy of Michigan and the Michigan Rules of Professional Conduct express public policy.
In November 2013, Charlevoix Probate Court Judge Frederick Mulhauser threw out both the Will and Trust. The attorney appealed Mulhauser’s ruling to the Court of Appeals, which heard oral arguments in March. A ruling from the Court of Appeals is expected soon.
The attorney for Mardigian’s brother Edward’s argued to the probate court judge, “For over 100 years, the Supreme Court has ‘bluntly warned’ lawyers not to receive gifts from clients under Wills they themselves have drafted…”
Incorrect Decision: Why I think the probate judge got this one wrong?
Yes, the lawyer’s action in this matter is reprehensible. His actions are what give lawyer’s a bad name and makes them subject to offensive lawyer jokes. If in fact Mardigian really intended for him and his children to benefit from his estate, there are so many simple ways that he could have avoided this dilemma. Quite simply, he could have had another lawyer draft the plan.
But the facts are the facts and regardless of how inappropriate this lawyer’s action was, I am not sure that the probate court got this ruling correct. Here is why. A violation of the ethical rules of the Michigan Rules of Professional Conduct do not necessarily create a violation of law. In fact, the ethical rules governing lawyers are not laws. The relevant section states…
“…a violation of a rule does not give rise to a cause of action, nor does it create any presumption that a legal duty has been breached.”
The rules are designed to provide guidance to lawyers and to provide a structure for regulating conduct through disciplinary agencies. They are not designed to be a basis for civil liability. Unlike many other states, presently Michigan has no law that bans lawyers from receiving gifts in an estate plan.
The drafting lawyer argued that the Michigan Supreme Court “has held that the proper way to address an attorney’s alleged violation of the Rules of Professional Conduct is by filing an attorney grievance.” He argued that the estate plan should only be nullified if there is evidence he exerted “undue influence” on its drafting.
The probate judge rejected the argument. He ruled that the lawyer’s unethical conduct could nullify the estate plan.
Incorrect Decision: What should have been the ruling?
It is my opinion that the probate judge made an incorrect decision. His ruling appears to be based on his disdain for the lawyer’s action and recognition that he may get away with a bad act. His incorrect decision appears to be based on his emotional response to the situation rather than applying sound legal judgment.
Assuming that this was the only legal theory for his ruling, it is my opinion that despite the reprehensible act, the lawyer and his children should have received the inheritance. However, his actions should have subjected the lawyer to a grievance, which should result in his suspension or disbarment from the practice of law.
Stay tuned…It will be interesting to read the ruling from the Michigan Court of Appeals.
The Probate Pro is passionate about probate and trust law.