Ruling Expected in Gunderson Suit : Courts: Judge to determine whether Laguna Hills attorney must disclose details of inheritances he received from wills and trusts prepared for his elderly clients.

An Orange County Superior Court judge is expected to decide today whether Laguna Hills lawyer James D. Gunderson can be obliged to disclose details of inheritances he received under the terms of wills and trusts he prepared for elderly Leisure World clients.

Judge James L. Smith on Thursday heard arguments on the matter from attorneys for Gunderson and relatives who have challenged a $3.5-million bequest that Gunderson received from a deceased 98-year-old Leisure World man, Merrill A. Miller, who was said to be both blind and deaf when Gunderson arranged for him to sign his last will and other testamentary documents only weeks before his death.

Miller’s surviving relatives have filed a court action to recover the money, claiming that Gunderson exercised fraud and undue influence to secure the largest single inheritance from the man’s $18-million estate.

In sworn depositions for the case, Gunderson has consistently refused to answer questions about his previous inheritances, saying that such matters between his clients and himself were protected by the “lawyer-client privilege,” as well as his clients’ rights to privacy.

On Thursday, attorneys for the relatives argued in court that Gunderson should be ordered to answer the questions about his previous inheritances because his answers would show a pattern “inconsistent with Mr. Gunderson’s defense that he was a friend” of Miller.

The attorneys--Harry Westover of Newport Beach, and his cousin, John H. Westover of Phoenix--also want Gunderson to produce the files he maintained on 37 clients to show that he has received numerous gifts from the estates of other clients.

John H. Westover said Gunderson had created corporations that later became the beneficiaries of his clients’ estates.

He said one such corporation, identified as RC/LH, an acronym for “Rotary Club of Laguna Hills,” was created specifically for the purpose of receiving a bequest from a client’s estate.

The lawyer referred to another case in which Gunderson persuaded a judge to name him legal guardian of a senile Leisure World woman. Once in control of her affairs, Gunderson drafted a new will that gave him the lion’s share of her estate--nearly $250,000 worth of AT&T; stock.

“It’s important that there be confidence in this system,” Westover told the judge.

Gunderson’s lawyer, Barry S. Michaelson of Santa Ana, disagreed. He said the other client files sought by the relatives’ attorneys were not relevant to Miller’s estate, and insisted that Gunderson’s client files were protected by his clients’ rights to privacy.

The Times reported last November that Gunderson had received millions of dollars in cash, stock and real estate from his clients’ estates, despite a longstanding California Supreme Court ruling that anything more than a “modest” bequest to an individual’s attorney raises questions of impropriety. Gunderson has repeatedly denied any wrongdoing.

Following publication of the newspaper articles, Gunderson’s law practice, located just outside the gates of Leisure World, promptly came under investigation by the Orange County Sheriff’s Department, the State Bar of California and the Orange County Bar Assn.

On Thursday, The Times reported that Gunderson’s insurance carrier has agreed pay a substantial sum--between $150,00O and $425,000--to settle a court action involving a Leisure World widow whose relatives claimed that Gunderson’s mishandling of the woman’s estate had caused the loss of $500,000.

Gunderson’s inheritances have also spurred state lawmakers to pass legislation that would restrict lawyers from making themselves beneficiaries of their clients’ estates. This week, the Senate Judiciary Committee voted 8 to 0 to approve a bill, co-authored by assemblymen Tom Umberg (D-Garden Grove) and Bill Morrow (R-Oceanside), that forbids lawyers to write themselves into their clients’ wills, except in limited special circumstances.

Aside from the proposed legislation, the State Bar is proposing to add to its rules of professional conduct a stipulation forbidding lawyers from preparing wills or trusts that bequeath them gifts.