Attorney Keeps $3.5-Million Client Bequest : Courts: Judge says money is James Gunderson’s unless it’s proven he got it illegally, as late Leisure World retiree’s relatives claim. But he must provide files of 37 other clients.

Laguna Hills lawyer James D. Gunderson will not be required to return a $3.5-million bequest from a Leisure World retiree before a lawsuit in that case goes to trial, but must turn over files of 37 other clients, a judge ruled Thursday.

Relatives of Merrill A. Miller, the 98-year-old retiree, sued Gunderson, claiming he exercised undue influence in securing the bequest from the blind and bedridden Miller just weeks before his death. They had requested that the money be returned immediately.

Superior Court Judge James L. Smith ruled, however, that the money is no longer part of Miller’s trust and belongs to Gunderson unless a jury rules otherwise. The balance of Miller’s $18-million estate is in the hands of an interim trustee.

“I don’t have any authority to compel the return of property that isn’t held by a trustee,” Smith said. “Nothing has been determined to be illegal or inappropriate yet.”

Gunderson has maintained that Miller was a personal friend and wanted the attorney to have the bequest. He has denied allegations that the gift was coerced.

On Thursday, Smith ordered Gunderson to produce files on 37 clients. Miller’s attorneys contend they will show that Gunderson received gifts from the estates of other clients, undermining the defense that Miller’s bequest was based on friendship.

Gunderson must provide the files by Aug. 13. He and his daughter, Linda, a trustee to the Miller estate, also must give depositions by Sept. 8 about cases in which he received gifts or bequests from clients.

Although a trial date in the matter has not been set, Harry Westover, an attorney for Miller, said he hoped it would begin by November.

Last month, Smith ordered the Gundersons to answer questions about the Miller bequest and inheritances from the other clients. When they refused, Smith ordered both to pay fines of $1,000. The fines are due Wednesday.

James and Linda Gunderson, who are law partners, had argued that disclosing that information would violate the clients’ privacy.

The Times reported last November that Gunderson was a major beneficiary of many of his clients’ estates, despite a state Supreme Court ruling that any more than a “modest” gift from an estate to an attorney raises questions of impropriety.

Besides the Miller bequest, Gunderson has received AT&T; stock worth almost $250,000 from a woman diagnosed as suffering from senile dementia; nearly all of a Leisure World man’s $427,000 estate; and a mortgage that gave him title to one square mile of land in San Bernardino County.

After the Times’ stories, state lawmakers approved legislation that would prohibit lawyers from writing wills giving them part of an estate. If Gov. Pete Wilson signs the bill into law, which is expected by Monday, California would join 38 other states with such restrictions.

Gunderson’s law practice is located just outside Leisure World in Laguna Hills, a retirement community of 22,000. His handling of estate cases continues to be under investigation by the Orange County Sheriff’s Department, the State Bar of California and the Orange County Bar Assn.