Opinion ID: 835242
Heading Depth: 2
Heading Rank: 1

Heading: The Holec Matters

Text: The accused was admitted to the Oregon Bar in 1979 and established a private practice in Wallowa, Oregon. Shortly after moving to Oregon, the accused and his wife were introduced socially to the Holec sisters, Stephanie and Rose. At that time, both sisters were in their sixties, were unmarried, and shared a home. Soon after meeting the accused, Stephanie hired him to represent her in a legal matter involving real property. The accused also drafted a will for Stephanie in December 1982. Fifteen years later, in January 1997, the accused approached Stephanie  then almost 80 years old  for a loan to remodel the home that he and his wife owned. Stephanie agreed and loaned the accused and his wife $15,000 at 10 percent interest, secured by a trust deed on their home. Four months later, in May 1997, the accused refinanced the home and paid Stephanie a part of the debt that he owed her; he did not, however, pay the loan in full. Instead of satisfying the note as originally contemplated, the accused paid Stephanie $6,700 [3] in cash and signed a new note at 10 percent interest for $10,000, the principal balance due. That renegotiated note was unsecured. The record does not establish the maturity date of the unsecured note. Over the next six years, the accused made sporadic payments on the unsecured note. Either shortly before or on May 16, 2003, the accused discussed his debt with Stephanie. At the time of that discussion, the note was either past due or soon to become due, and the balance on the note was $8,500. The accused and Stephanie  by then at least 85 years old  entered into another agreement to renew the loan. That agreement was again memorialized by an unsecured note, this time in a principal amount of $8,500, signed by the accused and his wife. That new note, dated May 16, 2003, stated a modified interest rate of eight percent, and extended the maturity date to May 1, 2005. [4] On May 16, 2003  the same date as the date on the renegotiated note  the accused discussed a legal matter with Stephanie. Specifically, she asked the accused to collect a debt for her and her sister Rose. The accused's handwritten notes, also dated May 16, 2003, document that meeting. Those notes set forth the address and phone number for a person named French and reflect calculations that show an amount due of $12,606.30. Three days later, on May 19, 2003, the accused mailed a letter to David and Fairy French (the Frenches), on behalf of Stephanie and Rose Holec (the sisters), demanding that the Frenches repay the sisters $12,606.30. That letter was prepared on stationary with Ronald D. Schenck, Attorney at Law letterhead. It stated that the accused represent[ed] Stephanie and Rose Holec. It further stated that, if the Frenches did not pay the amount owed, in full, by June 1, 2003, suit [would] be filed to obtain a judgment. The Frenches responded directly to the accused. They asked the accused to remind the sisters that the sisters had told the Frenches earlier not to worry about the money because the sisters were counting on the accused to repay his $10,000 debt to them. The accused thereafter advised the sisters to accept a new note from the Frenches for the remaining balance at an annual rate of five percent interest and to secure that debt with a trust deed on property owned by the Frenches. The accused strongly recommend[ed] that, if the Frenches refused those terms, then the sisters should authorize him to file an action against them. Ultimately, the Frenches and the sisters agreed to a new note in the amount of $8,736 at six percent interest, secured by a trust deed on the Frenches' home. In addition to advising the sisters in collecting the Frenches' debt, the accused drafted wills for each sister in April 2003. At that time, while the sisters were living together, Stephanie contacted the accused about a disagreement that she had had with Rose over their wills, which, according to Stephanie, left their respective estates to each other. Stephanie had decided that she no longer wanted Rose to receive her estate at her death. Stephanie asked the accused to draft a will that cut Rose out. The accused considered Stephanie's request to cut Rose out of her will stupid, and he knew that she would change her mind. Therefore, the accused drafted wills for both sisters leaving their respective estates to each other. The accused did so even though leaving Stephanie's estate to Rose was contrary to Stephanie's stated desire and even though, as he admitted, he never talked to or communicated with Rose about her estate or any other legal matter. Rather, he prepared Rose's will based only on his discussions with Stephanie, who was a substantial beneficiary under its terms. The accused delivered those wills to the sisters along with a cover letter addressed to them both. On Ronald D. Schenck, Attorney at Law letterhead, the accused wrote: Dear Stephanie and Rose, Here is a draft of a proposed Will [for] each of you for your consideration. You can write a note or a memo and set forth what personal property you want to leave to Pat [the accused's wife] or anyone else. You can give them a copy. I am sending a similar draft for Rose in hopes you two can discuss the problem and use this suggested method to resolve it. Rose, Stephanie did not ask me to do this draft for you. It is my idea after becoming aware of the disagreement you are having. Let's talk about it. We can put the home in Stephanie's name and Rose's CD's [ sic ] or whatever in her name and they will pass through these Wills as you both wish. Sincerely, RONALD D. SCHENCK Stephanie's draft will, enclosed with the cover letter, contained several blank spaces. The accused had inserted the blank spaces because Stephanie never told [him] who she wanted to get her estate, only where she did not want it to go  to the hated niece. The accused left those spaces blank so that, among other things, Stephanie could fill in the recipient of the residual of her estate, if Rose should predecease her. Rose's will did not have similar blank spaces, but instead provided that, should Stephanie predecease Rose, Rose's residual estate would be given to Rose's niece, Ramona Lode, whom Stephanie had told the accused she hated. The accused explained that he wrote that disposition into Rose's will, instead of leaving blanks, because that was exactly the disposition [the a]ccused understood from Stephanie that Rose wanted. According to the accused, his intent in preparing the wills as he did was to mediate the dispute between the sisters. That is, he was suggesting a legal vehicle that would accomplish Rose and Stephanie's desires as he understood them to be. As a part of that legal vehicle, the accused drafted a provision that would create a reciprocal family trust on the death of one sister and the survival of the other. The residual estate of the deceased sister would flow to The Holec Family Trust for the benefit of the surviving sister. In other words, as long as the sisters did not die at the same time, The Holec Family Trust would have been created under the wills prepared by the accused. Both wills named the accused as trustee of the trust, if it came into existence. As trustee, the accused would have had the responsibility to distribute the income and principal of the trust as the accused deem[ed] advisable for the support of the surviving sister. The distributions would have been made in such proportions, amounts, and intervals, as the Trustee determin[ed]. On the death of the beneficiary of the trust  i.e., the surviving sister  the trust would terminate, and all remaining assets of the trust would be distributed free and clear. Under Rose's will, if Stephanie was the surviving sister and the The Holec Family Trust was created for her benefit, then the remaining assets of the trust, at her death, were to be distributed to Lode free and clear. Under Stephanie's will, if Rose was the surviving sister and the The Holec Family Trust was created for her benefit, the remaining assets of the trust, at her death, were to be distributed to whomever Stephanie designated. Stephanie's will had two blank spaces that pertained to the Gift of Residue distribution on her death: (1) a space for the recipient of Stephanie's residual estate, should Rose predecease her; and (2) a space for the recipient of the remaining assets of The Holec Family Trust on Rose's death, should Stephanie predecease Rose. Around late September or early October 2003, Stephanie and Rose had a serious falling out, and Rose moved out of their shared home. Sometime later, the two sisters divided the debts that were owed to them. Rose took the debt owed by the Frenches; Stephanie took other debts, including the debt owed by the accused and his wife. The accused asserts that, in October 2003, Stephanie unilateral[ly] release[d the] accused of his obligation to her under the renewal note of May [16], 2003. [5] No satisfaction of that note was documented in the record. The accused stated that, despite Stephanie's unilateral decision to declare the debt satisfied, he expected to pay the loan off before [she] passed on. Nonetheless, the accused did not make any further payments to Stephanie after October 2003. Stephanie's friend, Margi Wyatt, testified that the debt had not been satisfied and that Stephanie relied on payments from the accused, and others, to live off of. In November 2003, Stephanie again consulted the accused on a legal matter. Stephanie asked the accused to prepare the documents for the sale of her home to Harry Beckenhauer, and the accused did so. The record is unclear whether the transaction was completed using those documents, because the majority of the documents that the accused prepared are unsigned. In July 2004, Stephanie again contacted the accused to prepare a will for her. In her initial telephone call to the accused, Stephanie informed him of several developments: that she was unhappy with Beckenhauer; that she wanted a new will; that she was arguing with Rose about money and to whom they were going to leave their estate; and that she was having trouble collecting from the people who owed her money. Shortly after that conversation, the accused met with Stephanie in her home and quickly concluded that she had significant problems with her mental ability. Nevertheless, the accused proceeded to discuss with Stephanie the revision of her will. In that discussion, according to the accused, Stephanie said that she wanted to leave her antiques and furniture and one half of the residue of her estate to the accused's wife, Pat. The accused indicated to Stephanie that he would prepare the will, including those gifts to his wife, but insisted that we go to your doctor, Dr. Boyd, and have him write a letter as to whether or not you're now presently competent to make a will, to know what you're doing, and I want it witnessed by two witnesses, and notarized as far as the witnesses [are] concerned. The accused thereafter prepared a will for Stephanie that included a gift of antiques and furniture and one half of the residue of Stephanie's estate to his wife, Pat. The other half of the residue was to go to Rose. However, according to the will's terms, if Rose were to predecease Stephanie, the entire residue would go to the accused's wife. Stephanie was hospitalized shortly after the July 2004 meeting, as well as on several other occasions in fall 2004. When she returned home from the hospital after one of those occasions, the accused visited her and presented the new will. Testimony at the hearing established that the antiques and furniture bequeathed to the accused's wife, under the terms of the new will, were worth at least $1,000, which the accused does not dispute. When questioned whether the gifts to his wife were substantial, the accused testified that Stephanie had no substantial assets at the time that he prepared the will. The accused also testified that Stephanie had substantial assets at the time that she had told him that his loan was forgiven, just 10 months earlier. The accused explained that seeming contradiction by asserting that Stephanie's financial condition had deteriorated quickly, over a course of only a few months. Nonetheless, the accused acknowledged that, under the will that he had prepared, in addition to the gift of antiques and furniture worth at least $1,000, his wife would receive the entire residue of Stephanie's estate if Rose were to predecease his wife. [6]