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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. I gave tempparry guardship to a friend of my granddaughter in 2012. I went to prison. I had custody. My daughter went to prison to. We are out. My daughter gave me custody but can get her back. She was not order to give me custody . but now we want granddaughter back from friend. She's 14 now. What rights do we have

  2. This sure is not what most who value good governance consider the Rule of Law to entail: "In a letter dated March 2, which Brizzi forwarded to IBJ, the commission dismissed the grievance “on grounds that there is not reasonable cause to believe that you are guilty of misconduct.”" Yet two month later reasonable cause does exist? (Or is the commission forging ahead, the need for reasonable belief be damned? -- A seeming violation of the Rules of Profession Ethics on the part of the commission) Could the rule of law theory cause one to believe that an explanation is in order? Could it be that Hoosier attorneys live under Imperial Law (which is also a t-word that rhymes with infamy) in which the Platonic guardians can do no wrong and never owe the plebeian class any explanation for their powerful actions. (Might makes it right?) Could this be a case of politics directing the commission, as celebrated IU Mauer Professor (the late) Patrick Baude warned was happening 20 years ago in his controversial (whisteblowing) ethics lecture on a quite similar topic: http://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=1498&context=ilj

  3. I have a case presently pending cert review before the SCOTUS that reveals just how Indiana regulates the bar. I have been denied licensure for life for holding the wrong views and questioning the grand inquisitors as to their duties as to state and federal constitutional due process. True story: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS Shorter, Amici brief serving to frame issue as misuse of govt licensure: https://www.scribd.com/doc/312841269/Thomas-More-Society-Amicus-Brown-v-Ind-Bd-of-Law-Examiners

  4. Here's an idea...how about we MORE heavily regulate the law schools to reduce the surplus of graduates, driving starting salaries up for those new grads, so that we can all pay our insane amount of student loans off in a reasonable amount of time and then be able to afford to do pro bono & low-fee work? I've got friends in other industries, radiology for example, and their schools accept a very limited number of students so there will never be a glut of new grads and everyone's pay stays high. For example, my radiologist friend's school accepted just six new students per year.

  5. I totally agree with John Smith.

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