Opinion ID: 1205164
Heading Depth: 1
Heading Rank: 1

Heading: Daniel Frazier Matter

Text: In December 1986, Daniel Frazier deeded certain real property to Attorney, who had previously represented him in several transactions. There is conflicting evidence in the record whether this was at the request of Frazier or Attorney. Frazier testified that he was asked by Attorney to deed the property because Attorney was short on cash and wanted to obtain a loan on the property. Frazier's expectations were that Attorney would use the property as collateral to obtain a loan, retain a portion of the proceeds for himself, and remit the balance of the loan proceeds to Frazier. He understood that Attorney was going to use the property as collateral until he paid off the loan, and then deed the property back to Frazier. Attorney obtained a $35,000 loan. According to Frazier, Attorney retained $25,000 of the loan proceeds and remitted $10,000 to him. According to Attorney, Frazier was in need of money and deeded the property so that Attorney could obtain a loan for Frazier. Attorney testified that of the $35,000 loan, Frazier got $20,000, and Attorney got $15,000. Attorney characterizes his retention of $15,000 of the loan proceeds as an innovative fee arrangement. The $15,000 attorney retained was to serve as a credit for legal work he was going to perform for Frazier. Certain facts are undisputed. No written document exists memorializing this transaction. Attorney did not advise Frazier to seek advice of independent counsel concerning the transaction. In conveying the property, Frazier signed a blank deed. Both Frazier and Attorney agree that the loan amount on the property was $35,000, but the consideration cited in the deed conveying the property to Attorney was $50,000, not $35,000. Attorney does not have copies of the checks evidencing the disbursement of the loan proceeds. The $15,000 that Attorney claims was to serve as a credit for future legal services did not appear on any pre-billing invoice. The property has not been reconveyed to Frazier. After Frazier conveyed the property to Attorney, Attorney conveyed the property for a consideration of $10, without Frazier's permission, to Atlantis Title, a corporation owned by Attorney. A one-half interest in the property was then conveyed by Attorney's title corporation to a third party for consideration of $10 and assumption of one-half of the existing mortgage balance. In 1987-88, Attorney worked on closing a $500,000 loan for Frazier. As part of the proceeds from the loan, $35,000 was paid to Atlantis, $15,000 of which would, according to Attorney, serve as another credit for attorneys' fees, and $20,000 of which would be used toward the mortgage on the property Frazier conveyed to Attorney. An addendum to the HUD-1 Settlement Statement reflects, as part of the disbursement of the proceeds of the $500,000 loan, a payment of $65,823 to Farmco, which had foreclosed on a previous loan to Frazier. This dispute with Farmco was actually settled for $30,000. The difference of $35,823 was paid to Attorney. However, these attorneys' fees are not indicated on the HUD-1 Settlement Statement. Attorney testified that these were handled outside the loan transaction. At a later point, Attorney refunded Frazier $15,823 in attorneys' fees.