YOU ARE HERE: LAT HomeCollections

Judge Removes O.C. Lawyer as Estates' Trustee


ORANGE — A probate court judge has removed Laguna Hills lawyer James D. Gunderson as trustee of an estate which bequeathed him $3.5 million under questionable circumstances and also stripped him of control over another estate where authorities were unable to account for $800,000.

Acting on his own initiative Friday, Orange County Superior Court Judge Tully H. Seymour relieved Gunderson--and appointed another lawyer--as trustee for the estate of Merrill A. Miller, a 98-year-old Leisure World man who died last February leaving an estate worth more than $18 million.

Miller's trust--the final version of which Gunderson's blind and bedridden client signed only six weeks before his death--gave Gunderson $3.5 million after taxes, and included a "no contest" provision that would deprive the other beneficiaries of their shares in the estate if they challenged any provision of the trust in court, including the bequest to Gunderson.

Despite that provision, the other heirs of the Miller trust filed a legal petition two months ago asking the Orange County courts to void the trust agreement making Gunderson a beneficiary, but at the same time to determine that they were not actually mounting a legal "contest." Earlier this week, they filed yet another petition asking the probate court to suspend Gunderson's powers as trustee.

Without ruling on their petitions, Seymour moved on his own to suspend Gunderson and appoint Santa Ana lawyer Ernest L. Hayward as trustee.

"It's a matter of public confidence in the court system," Seymour said, explaining his decision. "There is a tremendous amount of distrust, suspicion and fear in the legal community and the Leisure World community. I think it would be best if Mr. Gunderson and (his daughter and law partner Linda Gunderson) were not in the picture, at least temporarily."

Gunderson, who has repeatedly denied any wrongdoing, was not present in court Friday. But his attorney, Barry Michaelson of Santa Ana, said he had no quarrel with the judge's decision.

Said Michaelson: "This court is a wise court (and) . . . quite appropriately careful to be certain that not only is justice served, but the appearance of justice is served."

Michaelson said that the trust provision giving Gunderson one-fifth of Miller's stock in Abbott Laboratories dated to 1984 and was not a last-minute bequest. That stock was worth $3.5 million when Miller died earlier this year.

This week's legal actions removing Gunderson as trustee of the two estates came in the wake of a November article in The Times revealing how the lawyer had arranged to inherit millions in cash, stock and real estate from his elderly clients, despite a longstanding California court ruling that anything more than a "modest" gift from a client's estate to that person's attorney raises questions of impropriety.

Reacting to the newspaper's disclosures, authorities have launched four separate investigations of Gunderson, and the state Legislature is being asked to ban "no contest" clauses in wills and trusts where the attorney stands to inherit more than $500 or 5% of the estate.

Seymour said Friday that probate court investigators were "examining every file that (Gunderson) has had his hands on" as part of his investigation.

In addition, the Orange County Sheriff's Department, the State Bar of California and the Orange County Bar Assn. have each launched separate investigations into Gunderson's law firm, which is just outside the gates of Leisure World in Laguna Hills, a community of 21,000 residents.

Gunderson has boasted that he has represented more than 7,000 elderly Leisure World retirees in matters involving wills, trusts and conservatorships for seniors unable to manage their personal and financial affairs.

In addition to removing Gunderson from control of the Miller trust, the chief probate judge also stripped him of control over the $1-million trust of Gladys Grove, a 92-year-old Leisure World woman who was discovered to be dependent on nursing home workers for her basic toiletries and pocket change for telephone calls, postage stamps and writing paper.

Public Guardian William A. Baker filed a petition last week asking Seymour to appoint his office conservator for the woman, who was described as confused and frequently depressed, and to replace Gunderson as trustee of her estate.

According to court documents filed by Baker, Grove's net worth was "well over $1 million" four years ago, but so far the public guardian's office has only been able to identify assets worth about $230,000.

The public guardian's court filings noted that Gunderson, who has the power of attorney for Grove's health care, signed orders instructing nursing home personnel "do not resuscitate" her or keep her alive with artificial life support.

The public guardian's report also noted that Gunderson had signed documents indicating that he was acting in the capacity of conservator for Grove, but no court record of such a conservatorship exists in Orange County.

The public guardian's filings said that office was concerned that Gunderson "misrepresented his relationship to Mrs. Grove, and may have misrepresented her wishes regarding directives to her physician."

Los Angeles Times Articles