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Lawyer Defends Bequest to Him by Client : Courts: 98-year-old wanted him to have $3.5-million dollar gift, James Gunderson says in trial of civil suit brought by man’s relatives. Ex-partner backs testimony.

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TIMES STAFF WRITER

James D. Gunderson, the Orange County lawyer accused of profiting from his clients’ estates, testified Thursday that he received a $3.5-million tax-free bequest because his client, a 98-year-old man, wanted him to have the gift.

Relatives of Merrill A. Miller, a Leisure World resident who died in February, 1992, allege in a civil suit that Gunderson coerced or deceived the bedridden Miller into leaving him the largest single portion of an $18-million estate.

But Gunderson insisted that it was always Miller’s wish that he should inherit 20% of all his stock in Abbott Laboratories, which was valued at about $17 million.

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Gunderson testified that he shared a close friendship with Miller and was a beneficiary of his estate as early as 1984.

But the relatives’ lawyer, John Westover of Phoenix, is contending that Gunderson’s inheritance grew over the years.

In 1990, Gunderson instructed Ellsworth DeWeese--his close friend, a former law partner and his son’s godfather--to draw up Miller’s will and trust to hide any impropriety, Westover argued.

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DeWeese testified Thursday that Miller told him he wanted Gunderson to have a significant portion of his estate.

Westover quizzed Gunderson about another inheritance, of $250,000 received from a Leisure World woman who had been declared senile about four months before Gunderson prepared her last will and testament, making himself the estate’s major beneficiary. The other heirs sued, and Gunderson reached a confidential, out-of-court settlement with them that included a payment by Gunderson of $60,000.

Gunderson’s lawyer, Stuart Lesansky, said he plans to prove that Gunderson also deserved that bequest.

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The non-jury hearing, before Superior Court Judge Byron K. McMillan, is the latest in a series of actions that have followed a November, 1992, report in The Times detailing how Gunderson had inherited millions of dollars in cash, stock and real estate from clients whose wills and trusts were prepared by him and other members of his law firm.

The inheritances appeared to conflict with a longstanding California Supreme Court ruling that anything more than a “modest” gift to an attorney preparing a will raised suspicion of impropriety. The justices in that landmark case decided that a $20,000 bequest was excessive, and ordered the inheritance returned.

Immediately after The Times articles appeared, the State Bar of California publicly disclosed that it was conducting an investigation of Gunderson’s legal practice. Gunderson surrendered his license to practice law in California in January of this year, after State Bar prosecutors announced that they were prepared to file conflict-of-interest charges that could have led to his possible disbarment. Gunderson’s lawyers said the State Bar allegations were not related to any inheritances and that the lawyer retired from his practice because of failing health.

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