In a contested guardianship case involving Academy of Special Needs Planners (ASNP) Advisory Board Member A. Frank Johns, the North Carolina Court of Appeals finds that attorney Johns did not violate state ethics laws in opposing the ward's petition to restore competency because Johns was attempting to protect a large personal injury settlement from being controlled by the ward's husband. In the Matter of Janet Clark (N.C. Ct. App., No. COA08-1043, Feb. 2, 2010).
In 2005, Janet Clark, who had a history of substance abuse and mental health problems, was involved in a car crash that left her with a traumatic brain injury. Ms. Clark's husband (her seventh, whom she subsequently divorced) obtained guardianship of Ms. Clark's person and estate, but he later resigned as Ms. Clark's guardian, citing his own mental health problems. Ms. Clark's sister, Gail Zawacki, was appointed as the guardian of Ms. Clark's person, and she retained Greensboro attorney and ASNP Advisory Board Member A. Frank Johns to represent Ms. Clark in connection with the guardianship and issues surrounding the creation and funding of a supplemental needs trust to hold a large personal injury settlement that Ms. Clark eventually received. Ms. Zawacki and attorney Johns entered into a six-phase retainer agreement pertaining to the representation.
Shortly before the personal injury settlement was finalized, Mr. Clark filed a petition to restore his wife's competency, which attorney Johns vigorously opposed based on his belief that Mr. Clark was attempting to gain access to his wife's settlement. Although Ms. Clark assented to the petition, both of her court-appointed guardians sided with attorney Johns's position. While the petition to restore competency was pending, a trial court approved the personal injury settlement, including the funding of a (d)(4)(C) trust for Ms. Clark's benefit. The court also approved attorney Johns's legal fees, which were paid from a Qualified Settlement Fund. Eventually, Ms. Clark's competency was restored, and attorney Johns filed another petition requesting payment of additional fees incurred during the guardianship proceedings. The court approved the majority of attorney Johns's fees, but refused to reimburse him for development of a life plan for Ms. Clark because Ms. Clark's competency was restored before the plan was completed. The court also ruled that attorney Johns did not violate state ethics laws during the representation, despite the Clarks' claim that Johns behaved improperly by opposing the restoration of Ms. Clark's competency and by establishing the (d)(4)(C) trust with an organization that he incorporated and continued to associate with by serving on its board. The Clarks appealed the trial court's decision.
The North Carolina Court of Appeals upholds the trial court's decision, determining that attorney Johns committed no ethical violations. The court rules that attorney Johns informed Ms. Zawacki of the potential conflict of interest involving the pooled trust, and that his opposition to the restoration of competency was based on his genuine belief that "Mr. Clark was attempting to obtain control of Ms. Clark's personal injury settlement for his own purposes and that it would not be in Ms. Clark's best interest for her competency to be restored." In approving the majority of the legal fees, the court finds that "the principal purposes for which Booth Harrington [Johns's firm] was employed by the guardian of the person was clearly in Ms. Clark's best interest . . . the fact that Booth Harrington resisted the restoration of Ms. Clark's competency does not, given the facts revealed by the present record, disqualify the firm from receiving compensation from Ms. Clark's resources."
For the full text of this decision, go to: https://www.aoc.state.nc.us/www/public/coa/opinions/2010/pdf/081043-1.pdf
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