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Justices order refunds in estate planning UPL case

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The Indiana Supreme Court is shaking its proverbial finger at a company it found had engaged in the unauthorized practice of law, making it clear that the court’s orders must be followed or non-compliant litigants will be sanctioned.

In a two-page order  released Tuesday afternoon, the justices ordered that the Indianapolis-based estate planning services company United Financial Systems follow through with refunding money to those victimized by what has been determined to be the company’s unauthorized practice of law. This is the latest in the three-year-old case of State of Indiana, Ex. Rel. Indiana State Bar Association v. United Financial Systems Corp., No. 84S00-0810-MS-551.

In an April 14 ruling, the justices said that United Financial Systems should have known what it was doing was UPL, and as a result the Indiana State Bar Association was entitled to certain statutory attorney fees. The court ordered that disgorgement of fees the company received from its UPL should be returned. It ordered the company to notify all of its Indiana estate plan customers going back to 1995 about the decision, as well as those it retained since a related 2006 decision who might also be entitled to a refund.

But the company refused to pay those refunds, taking the position that the Supreme Court’s opinion doesn’t permit the issuance of refunds until the trial-level commissioner issues a restitutionary order.

“This reading of our opinion is incorrect,” the new court order states. “Accordingly, UFSC is ORDERED within ten (10) days of the date of this order, to issue refunds on all claims made to date to UFSC by persons entitled to refunds. Additionally, UFSC is ORDERED, within ten (10) days of the date of this order, to show cause why it should not be ordered to pay interest at the statutory rate on all claims by persons entitled to a refund, effectively from the date the claim was presented to UFSC.”

An exact figure of refunds or claims isn’t outlined in the order or in court filings, and attorneys representing United Financial did not return messages from Indiana Lawyer for this story. But in the Supreme Court’s opinion in April, it provided context for the potential amount: from October 2006 through May 2009, the company’s Indiana business included 1,306 estate plans grossing more than $2.7 million. Nationally, 18.8 percent of UFSC’s total income was reported to have come from those estate planning services in this state.

Wabash attorney Larry Thrush, who is representing two clients with claims against United Financial, said he’s very pleased to see this order from the court. Both clients have claims totaling about $2,500 each, and the company has been telling him that it won’t issue refunds until a commissioner issues a final restitution order.

“This takes away their reasoning for refusing, and I imagine all the clients with claims will now be able to move ahead with getting back money this company took from those services,” he said.

Aside from the refund issue, the court’s order also orders both United Financial and the ISBA to submit new briefs relating to approximately $19,500 in attorneys fees that are at dispute in the case.

Since the company’s attempt to further appeal this case failed when the Supreme Court of the United States denied to accept it in October, the matter now proceeds at the local level once a new commissioner is chosen to take over the case. Originally, the Supreme Court appointed Senior Judge Bruce Embrey from Miami Superior Court as commissioner on this case, and he handled the proceedings and issued a report last year with 266 findings. But he was recently elected county prosecutor and begins Jan. 1, and as a result he’s been removed from the case. The justices have not yet appointed a successor to handle the restitution and other ongoing issues in the case.
 

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  1. As one of the many consumers affected by this breach, I found my bank data had been lifted and used to buy over $200 of various merchandise in New York. I did a pretty good job of tracing the purchases to stores around a college campus just from the info on my bank statement. Hm. Mr. Hill, I would like my $200 back! It doesn't belong to the state, in my opinion. Give it back to the consumers affected. I had to freeze my credit and take out data protection, order a new debit card and wait until it arrived. I deserve something for my trouble!

  2. Don't we have bigger issues to concern ourselves with?

  3. Anyone who takes the time to study disciplinary and bar admission cases in Indiana ... much of which is, as a matter of course and by intent, off the record, would have a very difficult time drawing lines that did not take into account things which are not supposed to matter, such as affiliations, associations, associates and the like. Justice Hoosier style is a far departure than what issues in most other parts of North America. (More like Central America, in fact.) See, e.g., http://www.theindianalawyer.com/indiana-attorney-illegally-practicing-in-florida-suspended-for-18-months/PARAMS/article/42200 When while the Indiana court system end the cruel practice of killing prophets of due process and those advocating for blind justice?

  4. Wouldn't this call for an investigation of Government corruption? Chief Justice Loretta Rush, wrote that the case warranted the high court’s review because the method the Indiana Court of Appeals used to reach its decision was “a significant departure from the law.” Specifically, David wrote that the appellate panel ruled after reweighing of the evidence, which is NOT permissible at the appellate level. **But yet, they look the other way while an innocent child was taken by a loving mother who did nothing wrong"

  5. Different rules for different folks....

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