Thorough discovery leads to leverage and resolution

Issue November 2005 By Andrea R. Barter, Esq.

What should an attorney do when he finds himself the third attorney to work on a factually and conceptually convoluted case?

In attorney James E. Sandler’s case, he admits he didn’t knowwhat the case was about until, via discovery, he uncovered his client’s son’s self-dealingand financial mismanagement. Sandler’s analysis of the son’s financial history andbusiness dealings “laid a foundation which I think encouraged him to agree to asettlement.”

The case involved a widow who was referred to Sandler by theMassachusetts Bar Association’s Lawyer Referral Service. At issue was a strangefamily battle involving a few million dollars in real estate that her deceased husbandhad accumulated.

Shortly after her husband passed away, the client gambledheavily at Foxwoods Resort Casino, “either out of depression or she had a priorproblem,” said Sandler. She lost a fair amount of cash.

The client felt very guilty and panicked, so she put togetheran agreement with two of her three children, overseen in part by the old familyattorney who did not necessarily represent the client’s best interests. As a resultof a simplistic and poorly drafted agreement, the client essentially turned overall of her real estate to two of her three children in return for a small annualstipend they would pay her.

“Whether it was an independent decision or foisted on herby the two children was difficult for me to understand, especially since the wholeagreement I don’t understand. It was coercive and gave her no value. Her deceasedhusband’s attorney drafted the agreement, and he took a patronizing view of herneeds and interests,” said Sandler.

Sandler’s client had, according to the agreement, turned overto two of her children five income-producing properties in Massachusetts but did not turn over a Florida condominium that may have been worth $100,000. The third child, the youngest son,had been disinherited due to personal problems and the conflict that he createdin the family.

Without any imminent creditor’s threat against any of theproperties, and in particular the Florida condominium,the two older children brought a suit against their mother seeking specific performance,the conveyance of the Florida property.

“Their claim was that they were trying to protect the property,but I think it was greed. They were unsophisticated in their greed,” said Sandler.

An additional factor complicated Sandler’s task: his client’sprimary interest was not simply to have the properties returned to her; she wasalso interested in re-inheriting the youngest son, who had been left out of theprior arrangement.

“Initially, it looked like she didn’t have much of a case,but when I started doing discovery I came to realize she had a fairly good case,”said Sandler.

What Sandler learned in discovery was that his client hadbeen convinced she could not handle the properties even though she did not haveany direct control. The oldest son, a plumber, did the repairs, handled the tradesmen,managed the rental properties and paid the bills.

“The client had no responsibilities whatsoever, but she firmlybelieved she couldn’t handle the responsibility. In my mind, that was the resultof the children’s coercion. Two of her children had, for a number of years, handledall the finances, controlled the checkbook and did all the property management.Additionally, her son was earning up to $35,000 a year as a management fee for hisservices, which exceeded what the widow was receiving as income from the properties,”said Sandler.

More importantly, Sandler learned through discovery the eldestson’s motivation for self-dealing: he had had some financial reversals and had recentlyshut down his own plumbing business.

These factual levers “encouraged him to agree to a settlement.The other thing that helped the settlement was that the other son in the meantimehad cleaned up his act,” said Sandler.

Ultimately, the parties negotiated an arrangement wherebythe properties remained in a limited liability corporation for the two older children.The two children guaranteed the widow a set income and the youngest child receiveda property outright and immediately.

Sandler says he has received LRS cases for years and reportsthat the referral fee for LRS is less than he would have paid for a lawyer-to-lawyerreferral.

LRS makes more than 25,000 referrals each year to its 1,200attorneys across the state. If you are interested in becoming a member of LRS inorder to obtain referrals please call the Lawyer Referral Service at (617) 338-0556.