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In Re Saladino

OPINION FILED APRIL 3, 1978.

IN RE JOSEPH C. SALADINO, ATTORNEY, RESPONDENT.


Disciplinary proceeding.

MR. JUSTICE CLARK DELIVERED THE OPINION OF THE COURT:

In two separate but related complaints, the Administrator of the Attorney Registration and Disciplinary Commission has charged respondent, Joseph C. Saladino, an attorney since his admission to the Illinois bar in June 1950 and presently practicing in South Beloit, Illinois, with conduct which tends to bring the legal profession into disrepute. In the first complaint, count I charged respondent with taking title to premises without the prior approval or consent of the complainant, Mrs. Metha M. Van Hoveln, who had retained respondent to represent her in the real estate transaction; count II charged respondent with failure to provide the complainant with evidence or security for a loan she made, upon respondent's advice, to United Tool and Engineering Company; and count III charged respondent with the preparation of a series of wills or codicils for the complainant, without her knowledge, under which bequests to him, through the residuary clause, increased substantially. The Hearing Board found no misconduct as to count II, but recommended a reprimand for count I and censure for count III. During its hearing, the Review Board raised questions concerning the preparation and execution of a warranty deed which purportedly transferred title from the respondent to complainant, and concerning his answers before that board. The second complaint was filed as a result of the Review Board's continuance and the Administrator's investigation. On this complaint, the Hearing Board found respondent had given false testimony. The Review Board concluded that the second complaint was "filed as an ancillary" proceeding to the first and "does not warrant separate discipline," and recommended a one-year suspension.

Respondent first met complainant in 1957 when her husband asked respondent for advice. Subsequently, respondent prepared wills for them for which he was paid. In 1959, the husband died. Thereafter the relationship, while remaining that of attorney-client, grew into one of friendship. Indeed, respondent did not charge her for his services. Respondent visited complainant during her hospitalizations, having driven her to the hospitals on occasion. He was listed by her as the individual the hospital authorities should notify if they found it necessary. Apparently, Mrs. Van Hoveln grew dependent on respondent for some things. She had no relatives and few friends in the Rockford-Beloit area where she resided.

Evidence, apropos of count I, discloses that complainant, then 73, asked respondent to represent her in a real estate transaction in 1971. Respondent had handled the sale of a house for her previously. Growing dissatisfied with apartment living, she asked him to look at a small residence, in Beloit, Wisconsin, in which she was interested. Respondent recommended complainant buy it and prepared the deed. The closing was effected in his office September 7, 1971. Present were the sellers, not represented by an attorney; the complainant — the Hearing Board incorrectly found she was not there (the record shows this and the Administrator does not deny it); respondent; and his secretary. Title was taken in respondent's name and in his wife's, Lois Saladino, and the deed was recorded. Until delivery of the warranty deed conveying the property to her on January 5, 1972, a year and a half before the complainant filed a disciplinary grievance, complainant received no document or other evidence of ownership. Respondent maintains, but complainant denies, that before and again after the transaction she was fully informed of and assented to his taking title to the house with his wife. They were acting as trustees for her. He testified that, for her benefit, he compared this "trust-like" procedure to her profitable loan to United Tool which had been under a trust agreement. Respondent testified he was acting in this manner because Wisconsin does not recognize passive or land trusts; yet he was concerned that the "acquisition of this asset" might jeopardize her eligibility for governmental assistance for payment of medical expenses. He was also concerned that her physical condition — she had been hospitalized several times in the previous 10 years — might require a sale of the property at a time when she was incapable of participating in the sale. To protect her interests, respondent said that at the same time (September 7, 1971) he prepared the deed conveying the Beloit house from the sellers to him and his wife, he prepared another warranty deed conveying the same property to the complainant. That deed he placed in her file in his office. He also prepared a closing statement in which he showed her as purchaser. When she demanded the property be placed in her name, after discovering, she testified, it was in the Saladinos' name, he told her to come to his office the next day, January 5, 1972. He delivered the deed to her then.

While respondent maintains that his actions were motivated only by his friendship with and concern for Mrs. Van Hoveln, we cannot condone them. We believe respondent may have had good intentions, but we conclude that his actions establish a prima facie case of abuse of a fiduciary relationship. In McFail v. Braden (1960), 19 Ill.2d 108, 117-18, this court held:

"Where a fiduciary relation exists, the burden of proof is on the grantee or beneficiary of an instrument executed during the existence of such relationship to show the fairness of the transaction, that it was equitable and just and that it did not proceed from undue influence. [Citation.] The same rule has application where an attorney engages in a transaction with a client during the existence of the relation and is benefited thereby. [Citation.] Conversely, an attorney is not prohibited from dealing with his client or buying his property, and such contracts, if open, fair and honest, when deliberately made, are as valid as contracts between other parties. [Citation.] * * * [I]mportant factors in determining whether a transaction is fair include a showing by the fiduciary (1) that he made a full and frank disclosure of all the relevant information that he had; (2) that the consideration was adequate; and (3) that the principal had independent advice before completing the transaction." (Accord, In re Anderson (1972), 52 Ill.2d 202, 206.)

Even if we were to characterize respondent's actions as well intentioned, without hint of abuse of trust and confidence, it is clear he exercised poor judgment in taking title to complainant's house. Complainant was without any indicia of ownership. We agree with the boards below that complainant was therefore without adequate protection, for example, from respondent's creditors. Moreover, respondent's claim that a resulting trust could be inferred is weak at best, since that would entail litigation, perhaps extensive litigation.

As to count II, it is clear that complainant did deliver $15,000 to the respondent for him to invest in United Tool, a company he represented. However, both the promissory note and trust deed were payable to him as trustee for complainant. There was, in other words, a trust instrument sufficiently protecting complainant, who received repayment on the loan at 8% interest. On this record, we agree there was no wrongdoing with respect to count II.

The facts of count III of the first complaint are that respondent, who prepared several previous wills or codicils in which he was to receive bequests, was to receive all the residue, after specific bequests, including a diamond ring to Mrs. Saladino, in the last will he prepared for complainant. She signed that on January 5, 1972, the same day the deed for the Beloit house was delivered to her. The complainant, who was seemingly confused or uncertain about other matters in her testimony, did not recall previous wills respondent prepared for her and denied respondent was to be a beneficiary. Respondent, however, asserted that on several occasions, the last time being when complainant was hospitalized in November 1971, complainant had expressed her desire to make changes in the will and to leave the balance of her estate, after specific bequests, to respondent. He testified that he ignored her requests until she appeared at the office on January 5, 1972, at which time she signed and took the will.

Again, we concur with the boards below. We further specifically agree with the findings of the Review Board that the evidence is not clear and convincing that respondent was actually carrying out complainant's wishes. In Dial v. Welker (1927), 328 Ill. 56, 63, this court held:

"Proof of the relationship of attorney and client, and of the fact that the beneficiary, in whom trust and confidence were reposed by the testator, prepared or procured the preparation of the will by which he profits, raises the presumption that undue influence induced the execution of the will. Such proof casts upon the proponents, if the will is to be sustained, the necessity of producing evidence to show that its execution was the result of free deliberation on the part of the testator and of the deliberate exercise of his judgment." (Accord, In re Anderson (1972), 52 Ill.2d 202, 206.)

We do not see that execution of this will "was the result of free deliberation" or that complainant received independent advice regarding this will.

We do not wish to discourage attorneys from developing close relationships with or from undertaking more responsibility on behalf of clients. Given the position of attorneys in our society, it is not surprising that frequently they become indispensable to their clients. Their advisory role may come to transcend merely the dispensation of legal counsel. Having undertaken such responsibility, however, an attorney is under a duty not to abuse such a relationship and an obligation to avoid even the appearance of impropriety. In the instant case, respondent maintained such a relationship. (In fact, during the more-than-a-year interval between the acts complained of (on September 7, 1971, and January 5, 1972) and the initial filing of a complaint (on April 30, 1973), complainant continued to rely on respondent. ...


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