By Lee Dryden
BridgeTower Media Newswires
DETROIT - A testator's intent, a professional rule and a prior case have made for a messy situation that has again landed before the Michigan Supreme Court.
The high court heard oral arguments Dec. 6 in In re Mardigian Estate. Attorney Mark S. Papazian prepared a will and trust that left most of Robert D. Mardigian's $16 million estate to Papazian and his children.
Mardigian's relatives challenged the documents, prevailing in the Charlevoix County Probate Court, which agreed that Papazian violated the Michigan Rules of Professional Conduct. MRPC 1.8(c) prohibits a lawyer from drafting an instrument that gives the lawyer or the lawyer's relatives any substantial gift.
The Court of Appeals reversed and remanded in a split published opinion.
The case has centered on the apparent conflict between the professional rule and the 1965 Michigan Supreme Court decision in In Re Powers Estate, which held that the drafter of a will or trust is not disqualified from inheriting under that instrument, but that there is a presumption of undue influence.
In the October 2015 opinion, the Court of Appeals panel majority stated that Powers is "directly on point to the facts presented in the instant case, and as such is binding on this Court."
"Under Powers, we are required to remand for further proceedings, where appellant would be required to overcome the presumption of undue influence arising from the attorney-client relationship in order to receive the devises left to him and his family."
The opinion written by Judge Kurtis T. Wilder - who now sits on the high court - joined by Judge Cynthia Diane Stephens stated that the "primary goal of interpreting wills is to give effect to the testator's intent as long as it is lawful."
Judge Deborah A. Servitto dissented, stating that "Powers was decided long before the 1988 enactment of the MRPC, or even its predecessor, the Code of Professional Conduct, which was adopted in 1971. MRPC 1.8(c) now specifically prohibits this conduct."
The Supreme Court granted leave to appeal after hearing oral arguments in January 2017.
During the recent arguments, Mardigian's relatives' lawyer stressed enforcing the professional rule. Papazian's counsel highlighted the importance of honoring a testator's intent.
Enforcing the professional rule
Paul D. Hudson, who represents Mardigian's relatives, said this case is about "the court's power to enforce its own rules of professional conduct."
Papazian violated MRPC 1.8(c) by preparing the documents benefiting himself and his children, Hudson said.
"Rule 1.8(c) says a lawyer shall not do this under any circumstances and the petitioner did it anyway," said Hudson of Miller Canfield in Kalamazoo.
"Now he argues that the court's hands are tied, that there is absolutely no way as a matter of law for you to keep him from inheriting the money. You can send him to the Attorney Grievance Commission for consideration of limited disciplinary measures like suspension or disbarment, but he says you can't keep him from taking the money.
"We submit that that is a pretty stunning proposition. Why should an unethical lawyer ever be permitted to walk out of a Michigan courtroom with a chance at winning millions of dollars under a legal document that he prepared in violation of his ethical duties? And why should a court of law ever have to put its own stamp of approval on that regime?"
The Michigan Supreme Court has exclusive authority to regulate the practice of law and lawyers' conduct, Hudson said, adding it is up to the court to enforce its own ethics rules and refuse to permit a lawyer to profit from unethical conduct.
"This is the court's domain, not the Legislature's, and so this is one of the rare circumstances where the court can't wait for the Legislature to ride to the rescue and solve this problem for us," he said.
Honoring testator's intent
J. David Garcia, who represents Papazian, cited written communications between Papazian and Mardigian.
"The lawyer asks for nothing, the lawyer doesn't suggest he should get anything. The lawyer says, 'You've asked me to do your will. You decide, all caps, you decide who gets what,'" Garcia said. "The decedent writes back saying, 'There's a few specific things for some other people, but you as my lifelong friend get my property.' That's in the decedent's own hand."
Papazian carried out that request and others that had nothing to do with him, Garcia said.
Mardigian received advice from financial consultants and clearly understood reports on his estate plan, Garcia said.
"This is an individual who revised his estate plan many, many times over the last 20 or so years of his life," said Garcia of Young & Associates in Farmington Hills.
There were opportunities, including with Papazian, for Mardigian to change provisions he didn't like or had changed his mind about, Garcia said.
Mardigian received advice from another lawyer, who indicated that Mardigian was satisfied with the latest version of his arrangements, Garcia said.
"To me that meant his current documents that he had already signed were fine and that's the way I took it," Garcia said. "And that happens within a matter of a few weeks before his death."
Addressing the impact of a potential bright-line approach - where a will or trust would be invalid if the lawyer who prepared it benefits - Garcia said that would be clear but it would mean facts don't matter and testator intent would be irrelevant.
"I cannot think of an action or rule that this court could implement that would be more fundamentally adverse to the idea of trying to discern testator intent," he said.
Published: Fri, Dec 29, 2017
