The ARDC charged a lawyer handling a divorce, Justin Tedrowe, with wrongfully altering a form, obstructing justice and defrauding an opponent. Tedrowe sucessfully defended himself at trial.
An accusation that a lawyer altered a document could be very difficult to defend. The ARDC would show that the document was altered (after it was signed) and then the lawyer would have a difficult time defending the claim.
Tedrowe represented Matthew Molitor in a domestic relations case filed by his wife, Kathy Molitor.
The trial court ordered that a Pacific Life Annuity be divided 50/50 between the parties. Tedrowe prepared a withdrawal form and then filed a petition for rule to show cause to obtain Kathy Molitor’s signature on a withdrawal form.
When the form was submitted, Pacific Life requested that the parties submit a QDRO or qualified domestic relations order. Tedrowe thought that request by Pacific Life was incorrect and devised a plan to work around the QDRO requirement by withdrawing the entire balance of the Annuity and depositing it in his client trust account where he would then divide the proceeds between the parties.
The Hearing Board explains how the Pacific Life withdrawal form was altered. Please note that Richard Ozols was Kathy Molitor’s financial advisor. Tedrowe sent the revised Pacific Life withdrawal form to Ozols. :
“[Tedrowe] testified he told Ozols he would modify the form in a way that would avoid the need for a QDRO, and he asked Ozols to run it by Kathy for her approval. He recalled that Ozols agreed to proceed in that fashion and to check with the corporate personnel who had to review the form. (Tr. 32, 39-40, 44, 71, 73-74).
Respondent revised the first page of the Pacific Life withdrawal request form by crossing out the option for “withdraw 50% of value,” and crossing out the words “50% of value” that had been written in after the “surrender of the contract” option. As a result, the form reflected a request for 100% of the annuity to be surrendered and transferred to Respondent’s client trust account. Respondent inserted an arrow in the margin pointing to the revision because he wanted to call attention to the change from the original form he had sent to Ozols. He testified the original form had no scratch-outs or arrow because no changes had been needed at that point. (Tr. 48, 75-76; Adm. Ex. 7).
Respondent testified he sent the revised form to Ozols and requested that Ozols check with Kathy to see if she would agree to the change. Respondent was aware Ozols communicated with Kathy regularly and did not expect him to send the revised form to Pacific Life without Kathy’s agreement. In retrospect, Respondent recognized the better practice would have been to use a clean form to make the revisions and to write another cover letter. (Tr. 29-30, 32, 74-75, 77, 101).
Caryn Mazzulo, Respondent’s legal assistant since 2008, testified that Richard Ozols, the LPL financial advisor in the Molitor case, left a message on Respondent’s voice mail on March 15, 2014. Respondent’s telephone records reflect calls from his office to Ozols on March 17, 18 and April 1, 2014. Respondent recalled he was checking on the status of the withdrawal form and believed the telephone call of March 18, which was over four minutes, reflected his conversation with Ozols about the need for a QDRO. A fax header on a copy of the February 10, 2014 court order reflects that Respondent faxed that order to Ozols on March 18, 2014. Respondent drew an arrow next to the provision in the order requiring the 50/50 division of the annuity. (Tr. 70, 73, 81, 176, 179; Resp. Exs. 18, 19).
Respondent did not hear from Ozols between March 18 and April 1, 2014, nor did he get any response from Kathy’s attorney. Respondent identified a telephone message indicating that Ozols called his office on April 1, 2014 and left the message that “Kathy has all forms with directions.” Respondent interpreted the message to mean that Ozols was sending Kathy the modified withdrawal form for her approval, and would have her re-sign the form or initial the revision before sending it to Pacific Life. (Tr. 82-86, 96, 100).
Respondent heard nothing from Ozols after April 1, 2014. On April 8, 2014, Respondent filed a Petition for Rule to Show Cause stating that Kathy had engaged in delays and subterfuge and asking the court to compel her to make the annuity withdrawal. With respect to an assertion on the first page of the petition that Kathy failed to sign the withdrawal documents, Respondent testified the statement was true because the form she signed was unusable after Pacific Life required a QDRO. The second page of his petition explained that Kathy had signed a withdrawal form, but had not signed additional papers sent to her on March 18, 2014. Respondent testified he was trying to convey that Kathy needed to sign the modified forms, and acknowledged his wording was inartful. With respect to his reference in the petition to Ozols as a Pacific Life “representative,” Respondent testified that representation was true because Ozols sold Pacific Life products, but was not an employee of Pacific Life. Respondent did not advise the court of any revision to the form 49 or that he had attempted to have Pacific Life distribute the entire amount of the annuity. He stated that information would have come out when they appeared before the judge to explain what had occurred. He denied trying to misrepresent anything to the court. (Tr. 42, 45-46, 49-50, 87-89; Adm. Ex. 8)….
Respondent testified he prides himself in the way he practices and handles divorces. The revision to the Pacific Life withdrawal form was made for a good reason, and he was not trying to slip it past anyone. By suggesting that 100% of the annuity proceeds be transferred to his client trust account, he was not intending to take any money for himself or to act contrary to the court’s order of a 50/50 split between the parties. He feels his revision reflecting a 100% surrender was consistent with the court’s February 10, 2014 order and with the parties’ goal to avoid the use of a QDRO. (Tr. 78-79).”
The Panel concluded that Tedrowe did not do anything improper. It explained: “We conclude the Administrator did not prove by clear and convincing evidence that Respondent conveyed, or intended to convey, to Ozols that Kathy had approved the revisions to the withdrawal form, or that he submitted, or attempted to submit, the altered withdrawal form to Pacific Life without Kathy’s approval. On the contrary, the evidence indicated that Respondent did nothing more than communicate a proposal to Ozols for transmission to Kathy, and did not represent to Ozols that she had already approved the changes. Accordingly, we find Respondent did not engage in dishonesty, deceit, fraud or misrepresentation in violation of Rule 8.4(c).”
In reviewing the opinion, a key fact in Tedrowe’s favor was that he sent the altered Pacific Life withdrawal form to Ozols, not Pacific Life. Had he done so, the outcome might well have been different.
Another key factor is that there was no financial harm to Kathy Molitor. She did not lose her interest in the annuity. The Panel appeared to rely on that factor as well.
In my opinion, after Pacific Life rejected the form, Tedrowe could have avoided any trouble by simply having the form retyped and signed by both of the Molitors.
In sum, this a rare defeat for the ARDC where the lawyer was able to explain why he altered a form after someone signed it.
Edward X. Clinton, Jr.