Judge Orders Probe of Wills Lawyer Handled : Estates: O.C. sheriff will also investigate James D. Gunderson, inheritor of millions from elderly clients.

Orange County’s chief probate judge Monday ordered an investigation into cases handled by a Laguna Hills law firm whose senior partner prepared numerous wills for Leisure World retirees, making himself the recipient of millions of dollars in cash, stock and real estate.

Superior Court Judge Tully H. Seymour, who presides over the court where wills and trusts are administered, said investigators have begun to review all files in which James D. Gunderson or his law partners served as counsel of record. Investigators also plan to examine cases in which Gunderson, 67, served as a trustee or conservator.

The court investigation follows a Times report Sunday that detailed Gunderson’s receipt of gifts from several clients despite a longstanding California Supreme Court ruling that says accepting anything more than a “modest” gift from a client’s estate raises questions of propriety.

Gunderson, who has vigorously denied any wrongdoing, did not return calls Monday. His attorney, Barry Michaelson of Santa Ana, said Gunderson has not breached any ethics rules. He described the Times article as filled with “many inaccuracies . . . its entire thrust was to besmirch the reputation of Mr. Gunderson.”

Also on Monday, an officer at the Orange County Sheriff’s Department said the department has launched its own investigation into Gunderson’s practice. Capt. Andy Romero, who heads the sheriff’s investigations unit, said the department is “always concerned in cases where elderly people are involved as victims. We’re concerned about it, and we’re looking at these areas.” He declined to elaborate.

In addition, two Orange County bar groups reacted with concern over the gifts reportedly bequeathed to Gunderson. Thomas Malcolm, president of the 6,000-member Orange County Bar Assn., indicated that his organization would be willing to investigate any complaint filed against Gunderson by the lawyer’s clients or heirs of former clients.

“I think the fact that an attorney would include himself in wills and trusts of his client is presumptively improper,” Malcolm said. “While everyone in our system is entitled to a presumption of innocence, these facts do not pass the smell test.”

Malcolm said the Bar Assn. would determine if any forthcoming complaint has merit, investigate it and, if warranted, make a recommendation to the State Bar of California for disciplinary action.

John J. Veth, president of Orange County Barristers, a 600-member group open to attorneys with less than 10 years’ experience, said that “the facts as presented (in the story) raise questions. I’m confident with the exposure that you have given it, if there is any impropriety, the State Bar would look into it.”

Judge Seymour said the court’s investigation will “rely a lot on (staff members) who have handled (court) files over a period of time.” He said investigators will also entertain complaints from the public and “we’re going try to pull it all together.”

“All matters which indicate potential wrongdoing or violation of canon of ethics will be referred to the State Bar,” the judge said. “If it appears there are matters that involve violations of criminal law, they will be referred to the district attorney.”

In one case, Gunderson persuaded a judge to name him legal guardian of a Canadian woman who was suffering from senile dementia and was incapable of managing her assets. After becoming her conservator, he drafted a new will that gave him the lion’s share of her estate--$225,000 worth of American Telephone & Telegraph Co. stock.

One of the woman’s heirs, who lives in Canada, accused Gunderson in court documents of defrauding the rightful beneficiaries of their shares in the estate with a will that the dead woman was obliged to sign against her wishes. The heir abandoned her court challenge, however, when Gunderson offered her $60,000 in exchange for dropping the case.

Gunderson also received $3.5 million in stock from one estate and a 316-acre Fresno County farm from another, records show.

Several trusts prepared by Gunderson gave him sole and absolute authority over estates valued at hundreds of thousands of dollars. He was frequently empowered to dispose of the assets any way he chose, and he has often elected to pay large sums to parties with whom he was doing business, to his law partners for legal services to the estates in question, to various charities, and to his alma mater.

Legal ethicists say California courts are becoming increasingly mindful of how attorneys can abuse relationships with their clients by exercising “undue influence” over the elderly, who are frequently lonely and rely on their attorneys for more than legal advice.

In a precedent-setting 1989 case, the Estate of Margaret H. Lind, the 2nd District Court of Appeal noted that “such exercises of undue influence by attorneys are especially egregious, and require the closest scrutiny.” A probate court shouldn’t wait for someone to challenge a will, the decision states, but “should, upon its own motion, raise the presumption of undue influence and require the attorney to rebut the presumption” in suspect cases.