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California Legal Ethics Keyed to Wydick, 12th Ed.
Phillips v. Carson
Citation:
240 Kan. 462, 731 P.2d 820 (1987)Facts
Thelma Phillips retained attorney David Carson and his law firm to handle her husband’s estate after his death in 1978. Phillips paid the firm $80,000 in fees, which Carson told her would cover all legal services until the estate closed. While representing Phillips, Carson handled various legal matters for her including tax issues, a dispute with a builder, and negotiations regarding a sulphur lease. In 1980, Carson told Phillips he was having financial problems, and she loaned him $200,000, secured by a second mortgage on Arizona property. In 1981, she loaned him an additional $70,000. In 1982, Carson asked Phillips to release her mortgage on the Arizona property so he could refinance, offering her a mortgage on his 90-acre property in Wyandotte County instead. Carson told her this would put her in a better position, and relying on his advice, she released the Arizona mortgage. Carson gave her a new promissory note for $274,933.70 and prepared a mortgage on the Wyandotte County property but failed to file it. Carson never advised Phillips to seek independent counsel regarding these loan transactions. When Phillips discovered the mortgage hadn’t been filed, she retained new counsel who filed it, but Carson subsequently filed for bankruptcy, rendering her claim unsecured.
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