Attorney Acting as Trustee Who Hired Construction Company He Helped Start Is Not Guilty of Misconduct

A California bar court dismisses professional negligence charges against an attorney who, while serving as trustee for a client, hired a construction company he helped start to make repairs on the client's home. In the Matter of Bradshaw (Cal. State Bar Ct., No. 16-O-15558, July 30, 2019).

Attorney Drexel Bradshaw created a trust for Ora Gosey, in which he was named successor trustee. The trust stated that the trustee's priority was to support Ms. Gosey's health and comfort and that the trustee could use a business in which the trustee had an interest as long as the trustee did not act in bad faith. When Ms. Gosey became incapacitated, Mr. Bradshaw became her conservator and the trustee. He took out two reverse mortgages and used the money to provide her care and make repairs on her house. To perform some of the repairs, Mr. Bradshaw hired a construction company that he had helped to start.

The Office of Chief Trial Counsel of the California State Bar (OCTC) charged Mr. Bradshaw with violating rules of professional conduct by breaching his fiduciary duty and scheming to defraud a trust, among other things. The hearing judge found Mr. Bradshaw culpable of the charges and recommended disbarment. Mr. Bradshaw appealed.

The California State Bar Court dismisses the charges against Mr. Bradshaw, finding that he did not breach his fiduciary duty or violate other rules of professional conduct. According to the court, by "obtaining reverse mortgages, arranging for [Ms.] Gosey’s care, and maintaining her home at a fair cost so that she could stay there, [Mr. Bradshaw] fulfilled his fiduciary duties under the trust." In addition, the court finds that the evidence showed that the house repairs were reasonable and while there was no evidence Mr. Bradshaw had control of the construction company, even if he did, the trust permitted him to hire the company as long as he wasn't acting in bad faith.

For the full text of this decision, go to: http://www.statebarcourt.ca.gov/Portals/2/documents/opinions/Bradshaw_%2016-O-15558_%20Opinion_and_%20Order.pdf

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