AN OBJECT LESSON IN HOW NOT TO HANDLE A GUARDIANSHIP
March 26, 2012 § 6 Comments
I try not to comment on pending litigation, but the ongoing saga of attorney (for the moment) Michael J. Brown of Jackson bears mentioning here as an object lesson for all of you who handle guardianship — and any other fiduciary — matters.
To catch you up … Mr. Brown opened a guardianship for Demon McClinton, a child who had inherited $3 million from his mother, Rebecca Henry. Ms. Henry was the daughter of late Mississippi civil rights icon Aaron Henry. Attorney Brown never opened a guardianship account, depositing the funds instead in his trust account. To make a long, sordid story short, the funds were bled dry by unauthorized disbursements, extremely questionable “investments,” so-called “loans” — including “loans to himself — and outragous attorney’s fees. You can read a recap of the special master’s report here.
Brown’s misconduct drew the attention of Chancellor Dewayne Thomas. Brown at first claimed that the file, which he had checked out of the clerk’s office, had been destroyed when a pipe burst at his office. This proved to be a perjurious lie when the Special Master, acting pursuant to a search warrant, found the file in the attic of Brown’s home in a box marked “McClinton.”
At a show-cause hearing, Brown tried to assert that his schemes had been approved verbally by a preceding chancellor. Of course, Chancellor Thomas rejected that claim and ordered Brown to limit himself to to what was of record, which clearly established that none of Brown’s many transactions had been approved by any chancellor. Brown testified that there were no funds actually missing because he had accounted for every unauthorized expenditure, “loan,” “investment” and other impropriety. In other words, they aren’t missing because we know their whereabouts.
Chancellor Thomas has ordered the soon-to-be erstwhile lawyer jailed, subject to $250,000 bond, until he restores the missing funds. You can read more about Mr. Brown’s epic mishandling of this case on Philip Thomas’s blog, which includes links to other articles on the subject. An article that includes Judge Thomas’s order is here.
Several years ago I ordered a lawyer and guardian to show cause why they should not be sanctioned for mishandling guardianship funds to the tune of $45,000. The lawyer had handed the settlement check to the guardian, allowed the guardian to go by himself to open a restricted guardianship account, but the guardian deposited the funds instead in his own credit union account. No accountings were filed for several years, even after my predecessor, and then I, ordered that they be done. The lawyer at the hearing disclaimed any responsibility, shucking all the blame off on the guardian. I did not buy it. UCCR 6.01 and 6.02, and MCA § 93-7-253, along with practically all of the Rules of Professional Responsibility, persuade me to the contrary. The lawyer has a duty to the court to ensure that the fiduciary is faithful in carrying out his responsibilities.
Let me restate that: The lawyer has an ethical and professional duty to the court to ensure that the fiduciary is faithful in carrying out his responsibilities.
As the chancellor is the superior guardian of the ward, the lawyer is the arm and officer of the court, charged with the professional responsibility to act as the court’s agent to make sure that the fiduciary is acting solely in the best interest of and for benefit of the ward.
For the umpteenth time, I urge you to pull every fiduciary file you have right now and start poring through them to make sure that every detail is in order. There should be no discrepancies, no questionable transactions, no unapproved withdrawals. Your accountings should be annual, with proper vouchers. If Mr. Brown’s experience still does not shake you out of your lethargy, re-read this post about the hair-raising Matthews v. Williams case. If you’re not willing to strap on the high level of responsibility and vigilance required in fiduciary matters, defer the case to an attorney who will.
As Phillip Thomas so eloquently put it on his blog:
“Any lawyer who has ever walked past the chancery courthouse knows that Brown’s story is complete and total B.S. Chancellors are sticklers for the rules and they want guardianship funds locked up tight. The suggestion that any chancellor would verbally approve bogus sounding investments and loans is preposterous, as is every other detail of Brown’s story. It is beyond preposterous.” [Emphasis in italics added by me]
If you’re not the altruistic type, or you don’t buy into the idealistic concepts of professional responsibility, then look to your own self interest and tighten up your fiduciary practice. It could save you a load of money — and possibly your license to practice law.
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I am over such an account and I do the best I can to manage it. I took it upon myself to find out about doing a yearly accounting and have never asked for anything for myself from the account. My child has the account because his sister died and i almost did. It appears that it is getting harder and harder to manage the account because every time I have a Valid Reason to ask for something FOR MY CHILD SPECIFICALLY, I am met with more and more red tape. Because not everyone has their child/children ‘s best interest in mind I am having to do more work. I truly had hoped that when my child was ready for college that I would Not have to walk over coals of fire to make his payments. It looks as if that is not the case. I do not understand why I am basically being ‘audited’ simply because my son wanted me to purchase him an automobile. What parent wouldn’t want to provide for their child?
Thanks for that perspective. From where I sit, I see misused funds, inability to account, and unauthorized transactions too frequently, and I am sure that is the same for other judges across the state. The laws are pretty clear on what is required. I know it is frustrating to have to jump through all the hoops, but that is what the law dictates.