Finding that an attorney helped an elderly woman take out a loan she could not afford and invest in a nightclub venture without disclosing his conflict of interest, a California appeals court affirms an award of damages against the attorney for malpractice, breach of fiduciary duty and financial abuse of an elder. Wood v. Jamison (Cal. App., 2nd Dist., Div. 6, No. B196898, Sept. 30, 2008).
Shortly after Merle Peterson's husband of fifty-five years entered a nursing home and the couple's only child died, Mrs. Peterson met Patrick McComb. Mr. McComb told Mrs. Peterson that he was her nephew, but in fact he was not related to her. Over a short period of time, Mr. McComb convinced Mrs. Peterson to transfer nearly $200,000 to him and to obtain a $250,000 loan secured by her residence for investment in a nightclub joint venture.
Attorney Eddie B. Jamison represented Mr. McComb in the joint venture and simultaneously performed legal services for Mrs. Peterson, including giving her advice, selecting a lender, preparing documents and attending the closing of the loan, which had an 18.41 percent annual interest rate. From the loan proceeds, Mr. Jamison received a $4,000 referral fee from the bank and an additional $10,000 as repayment for a loan he had made to Mr. McComb. Mrs. Peterson, who could not afford the loan, defaulted on the first payment and the bank initiated foreclosure proceedings. She died the following month.
Craig Wood, the executor of Mrs. Peterson's estate, sued Mr. McComb, Mr. Jamison and the bank. Following a bench trial, the court found that Mr. Jamison committed malpractice, breached his fiduciary duties to Mrs. Peterson, and committed financial abuse of an elder. The court awarded damages against Mr. Jamison and when his request for a new trial was denied, he appealed.
The California Court of Appeals affirms, finding that Mr. Jamison committed malpractice and financial abuse of an elder by not advising Mrs. Peterson of his conflict of interest and that the nightclub investment was not appropriate for her, and for knowingly aiding and abetting in Mr. McComb's efforts to defraud Mrs. Peterson.
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