Lawyer-Beneficiary Removed as Estate Trustee

A probate court judge has removed Laguna Hills lawyer James D. Gunderson as trustee of an estate that bequeathed him $3.5 million, and stripped him of control over the affairs of a Leisure World woman after Orange County’s public guardian was unable to account for $800,000 of her estate.

Acting on his own initiative Friday, Superior Court Judge Tully H. Seymour relieved Gunderson--and appointed another lawyer--as trustee for the estate of Merrill A. Miller, a 98-year-old Leisure World man who died in February, leaving an estate of more than $18 million.

Miller’s trust--the final version of which Gunderson’s blind and bedridden client signed six weeks before his death--included a “no contest” provision that would deprive any other beneficiary of his or her share of the estate if any part of the trust were challenged in court, including the bequest to Gunderson.

The other heirs of the Miller trust had filed a petition asking the court to void the trust agreement making Gunderson a beneficiary, and at the same time to determine that they were not mounting a legal contest. Earlier this week, they filed a petition asking the probate court to suspend Gunderson’s powers as trustee.

Without ruling on their petitions, Seymour moved on his own to suspend Gunderson and appoint Santa Ana lawyer Ernest L. Hayward as independent trustee.

“It’s a matter of public confidence in the court system,” Seymour said. “There is a tremendous amount of distrust, suspicion and fear in the legal community and the Leisure World community.”

Gunderson, who has repeatedly denied any wrongdoing, was not present in court Friday. But his attorney, Barry Michaelson of Santa Ana, said he had no quarrel with the judge’s decision.

Michaelson said: “This court is a wise court who is quite appropriately careful to be certain that not only is justice served but the appearance of justice is served.”

A Times investigation published in November revealed that Gunderson had arranged to inherit millions in cash, stock and real estate from Miller and other elderly clients despite a longstanding California court ruling that anything more than a “modest” gift from a client’s estate to an attorney raises questions of impropriety.

Authorities have since announced four investigations of Gunderson. Seymour said Friday that probate court investigators were “examining every file that (Gunderson) has had his hands on.”

Apart from the Probate Court investigation, the Orange County Sheriff’s Department, the State Bar of California and the Orange County Bar Assn. have launched investigations into Gunderson’s law firm, just outside the gates of the Leisure World-Laguna Hills community of 21,000 residents.

This week, there was indication that the Orange County public guardian’s office is getting involved in the investigations.

The public guardian’s office got Seymour to remove Gunderson from controlling the million-dollar trust of Gladys Grove, a 92-year-old Leisure World woman who complained that the lawyer “gives her no money.”

Grove, who was described as confused and frequently depressed, was asking nursing home attendants for money to buy toiletries, make telephone calls and buy stamps and writing paper.

Grove’s net worth was “well over 1 million dollars” fours years ago, but the public guardian’s office has been able to recover only about $230,000, officials said.