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Lawyer Suspended for Bad Special Needs Trust Advice

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MAY 16, 2011 VOLUME 18 NUMBER 18
Sometimes in our zeal to help solve problems we lawyers can get carried away. We are constrained by ethical rules to avoid conflicts of interest. We also have to act competently. In a case involving an injured young man, a special needs trust and the state’s Medicaid claim against the trust, New Hampshire lawyer Paul Bruzga fell short.

Mr. Bruzga’s problems started with a tragedy that had nothing to do with him. George Doherty was injured, and in a coma. His brother Steven started a guardianship action. George and Steven’s sister didn’t think Steven was the right person to be appointed, and she objected. The court appointed Mr. Bruzga as attorney for George Doherty, to protect his interests in the contested guardianship.

Mr. Bruzga learned that Steven Doherty had applied for Medicaid coverage for his brother’s substantial medical bills. He pointed out to Mr. Doherty that his brother would not be eligible for Medicaid unless a special needs trust was established to handle all of George Doherty’s money. To this point, it appears that Mr. Bruzga’s advice — and his behavior as a lawyer — was fine. But then he took the first of several wrong steps.

When Steven Doherty asked for help setting up a special needs trust for his brother, Mr. Bruzga went ahead and drafted the document and filed it with the court for approval. Later he insisted that he was doing this as attorney for George Doherty, the injured client. He also negotiated a settlement between George Doherty’s brother Steven and their sister, and he insisted that this, too, was done as lawyer for George Doherty — but his behavior was easy to challenge when he signed the court pleadings as Steven Doherty’s attorney.

George Doherty, the injured brother and beneficiary of a newly-minted special needs trust, unfortunately died a few months later. Under the terms of the special needs trust his funds would first have to be used to pay back the New Hampshire Medicaid program for care he had received. But up to that point, neither Mr. Bruzga nor Mr. Doherty had even told the Medicaid agency about the special needs trust.

Several months later, when Medicaid had not requested repayment from the trust, Mr. Bruzga advised Mr. Doherty that he could just write checks from the trust to himself and his sister. Of course, the reason Medicaid had not sent a bill might have been related to the fact that no one had ever told them the trust existed — or, indeed, even that George Doherty had died.

Coincidentally or not, the state Medicaid agency had just begun to ask questions as the final trust checks were being written. A few days before advising Mr. Doherty to distribute the remaining trust assets to himself and his sister, Mr. Bruzga had heard from a Medicaid fraud investigator, who left a message expressing his concern that there was a special needs trust they had never heard about. Mr. Bruzga left a voice message for the investigator, and shortly thereafter counseled Mr. Doherty to close out the trust.

Within a two-month period, Mr. Bruzga exchanged messages with the Medicaid investigator, filed a final accounting with the court on behalf of Mr. Doherty, and advised Mr. Doherty to tell the court that Medicaid had not filed a request for repayment and that his final distributions should be approved. Then the Medicaid investigator sent a demand for repayment to Steven Doherty and his sister, noting that the distributions should never have been made. Then the sister filed a complaint with the New Hampshire Attorney Discipline Office, which investigated Mr. Bruzga’s behavior.

Throughout all of these periods, Mr. Bruzga spoke with Steven Doherty regularly and billed him monthly for his work. He signed some pleadings indicating he represented Mr. Doherty, even though he had originally been appointed by the court as the attorney for George Doherty, the injured brother. Though he sometimes indicated that he did not think he represented Steven Doherty, he gave him specific and direct advice at each turn in the case.

The Attorney Discipline Office decided that Mr. Bruzga had a serious conflict of interest in trying to represent Steven Doherty as his brother’s guardian and as trustee, while he was really supposed to be the brother’s lawyer. The Office also decided that Mr. Bruzga had simply given bad advice — legal advice that was clearly wrong — to Mr. Doherty.

The New Hampshire Supreme Court agreed. Lawyers are supposed to avoid conflicts of interest. They are also supposed to be competent. The Court decided that Mr. Bruzga had failed on both counts. Because he “knowingly rendered incompetent advice,” his license to practice law was suspended for six months. Bruzga’s Case, May 12, 2011.

Interestingly, the court never did get around to deciding what the appropriate sanction might be for Mr. Bruzga’s failure to recognize or avoid the conflict of interest. Though failure to act competently might ordinarily result in just a public reprimand, said the justices, his failure was so much worse that the suspension was appropriate — and so they did not need to decide what (presumably lesser) sanction might have been in order for the conflict of interest. It didn’t help Mr. Bruzga’s case that he had been in trouble with the attorney discipline process twice before in his 33-year legal career.

How much money was at issue? Not much. The total value of the special needs trust was about $50,000 and the Medicaid claim was about $74,000. It is hard to figure out what motivated Mr. Bruzga to give such breathtakingly bad legal advice.

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Robert B. Fleming

Attorney

Robert Fleming is a Fellow of both the American College of Trust and Estate Counsel and the National Academy of Elder Law Attorneys. He has been certified as a Specialist in Estate and Trust Law by the State Bar of Arizona‘s Board of Legal Specialization, and he is also a Certified Elder Law Attorney by the National Elder Law Foundation. Robert has a long history of involvement in local, state and national organizations. He is most proud of his instrumental involvement in the Special Needs Alliance, the premier national organization for lawyers dealing with special needs trusts and planning.

Robert has two adult children, two young grandchildren and a wife of over fifty years. He is devoted to all of them. He is also very fond of Rosalind Franklin (his office companion corgi), and his homebound cat Muninn. He just likes people, their pets and their stories.

Elizabeth N.R. Friman

Attorney

Elizabeth Noble Rollings Friman is a principal and licensed fiduciary at Fleming & Curti, PLC. Elizabeth enjoys estate planning and helping families navigate trust and probate administrations. She is passionate about the fiduciary work that she performs as a trustee, personal representative, guardian, and conservator. Elizabeth works with CPAs, financial professionals, case managers, and medical providers to tailor solutions to complex family challenges. Elizabeth is often called upon to serve as a neutral party so that families can avoid protracted legal conflict. Elizabeth relies on the expertise of her team at Fleming & Curti, and as the Firm approaches its third decade, she is proud of the culture of care and consideration that the Firm embodies. Finding workable solutions to sensitive and complex family challenges is something that Elizabeth and the Fleming & Curti team do well.

Amy F. Matheson

Attorney

Amy Farrell Matheson has worked as an attorney at Fleming & Curti since 2006. A member of the Southern Arizona Estate Planning Council, she is primarily responsible for estate planning and probate matters.

Amy graduated from Wellesley College with a double major in political science and English. She is an honors graduate of Suffolk University Law School and has been admitted to practice in Arizona, Massachusetts, New York, and the District of Columbia.

Prior to joining Fleming & Curti, Amy worked for American Public Television in Boston, and with the international trade group at White & Case, LLP, in Washington, D.C.

Amy’s husband, Tom, is an astronomer at NOIRLab and the Head of Time Domain Services, whose main project is ANTARES. Sadly, this does not involve actual time travel. Amy’s twin daughters are high school students; Finn, her Irish Red and White Setter, remains a puppy at heart.

Famous people's wills

Matthew M. Mansour

Attorney

Matthew is a law clerk who recently earned his law degree from the University of Arizona James E. Rogers College of Law. His undergraduate degree is in psychology from the University of California, Santa Barbara. Matthew has had a passion for advocacy in the Tucson community since his time as a law student representative in the Workers’ Rights Clinic. He also has worked in both the Pima County Attorney’s Office and the Pima County Public Defender’s Office. He enjoys playing basketball, caring for his cat, and listening to audiobooks narrated by the authors.