True Case Stories "Caught in the Crossfire"

What to do when clients are using each other for target practice

It was one of those days that make you wonder why you became an attorney in the first place. Dan Buchanan, a Riverside attorney, was staring out the window of his office, as if a solution might materialize out of the thick, dark clouds. He was listening to his client, George* tell a story Dan had heard many times before.

"He's a jerk, that's all," said George, bitterly. "Never respected his mom or me neither. Never come around to help out and now he wants half. I'm the one who fixed up the place for Maggie*. Put my sweat, blood and money in it. It just ain't fair."

Dan flipped through the case file. George's wife, Maggie, had died leaving the house in her name. When they got married they hadn't bothered to put George's name on the title of the house. After Maggie died unexpectedly, George discovered it would be necessary to probate her estate. Now, Maggie's grown son by a previous marriage, Tim*, was entitled to half the estate.

Meanwhile, in the offices of Hartnell, Horspool & Fox, Bryan Hartnell was listening to his client, Tim (Maggie's son) take shots at George. "He's not my dad, I don't see why he should get everything," he complained. "It's my mom's house, I grew up there. A lot of my personal stuff is there. George never liked me and now he's just using this to get back at me."

A high level of distrust between two clients

Over a period of weeks, Buchanan and Hartnell conferred several times, trying to arrange a "cease fire" between their clients. But the level of distrust and animosity was high, and there were other problems as well. George worked for a trucking company, but he had poor credit and no previous mortgage experience. He would have a hard time qualifying for a loan that would enable him to buy out Tim's half of the estate.

Also, the real property, which was actually two houses on one lot in Mentone, was overbuilt and non-conforming, and the court had overvalued the house compared to the lender's appraisal. Both attorneys realized that if the house was sold to a third party, their clients could only expect to receive about 75% of what the court said the house was worth. And because the house was in a community where real estate moved slowly, it might take many months or even years to obtain that!

"My client needs mortgage financing," said Buchanan, talking with Hartnell. Hartnell replied, "We also need someone who can gain the trust of both sides and help us work this out. What about Rick Harmon at The Suburban Group?" Since both attorneys had previous experience working with The Suburban Group, they called Rick.

Rick started working to arrange financing for George while his associate, Lorrie Bryan worked with both clients to find common ground. Tim said he wouldn't sign any agreement until George let him enter the house and get his personal things. At first, George wouldn't agree to this. "But Lorrie was really great," said Rick. "She was like a mother to them, she softened them up." Eventually, George did agree.

The Suburban Group was able to arrange financing for George so that he could buy out Tim's share, keep the house and still have payments of about $850 a month on a 30-year fixed rate loan. Finally, peace reigned and everyone was happy. Especially the attorneys.

*Not their real names.

Case Assessment and Conclusions

George wanted to keep the house. Tim wanted his share of the money. The key to resolving this case was finding a way to break the stalemate between two hostile clients. The attorneys were having difficulty making headway because their clients were not following their counsel. The mediation of an objective third party--The Suburban Group--proved to be the answer to a sticky situation.

But client hostility wasn't the only problem. This was a nonconforming property that had been overvalued by the court referee, and George had a poor credit history and weak borrowing position. In spite of all this, The Suburban Group was able to arrange attractive, affordable financing.

Thanks to their previous relationship with both attorneys -- as well as their ability to "stand in the gap" between two difficult clients -- The Suburban Group was able to help overcome all barriers and resolve the crisis to the satisfaction of all parties.

Why this Storyletter was Written

Ever since we began focusing our support on probate legal professionals like yourself and pioneered the use of mortgage financing to close estates, it hasn't always been easy to explain to prospective clients all of the benefits our full scope of services has to offer you.

In the early days, we relied on word of mouth referrals and Bar Association speeches. Probate attorneys and paralegals learned that we were the only lender which concentrated all of their efforts on trust and estate financing.

That's why we developed a full spectrum of loan programs for estate representatives and other fiduciaries as well as borrowers who prefer to sign personally.

However, while the primary emphasis of our services has never changed, the number of financial and consulting services has expanded.

Early on, the only choice available for obtaining a loan while still in probate was for the estate rep. to borrow on the probate realty. Today, nearly two-thirds of our loans are to borrowers who wish to obtain bank rates in order to buy out other heirs.

Tip for Today:

Obtain copies of recorded mortgages and other liens on each new estate case. Then, make contact which each creditor early to determine balances due and keep payments current. This will help you to avoid delays and surprises by allowing ample time to discover and correct discrepancies.

We use Old Republic Title Co. to obtain recorded documents (on a professional courtesy basis). Call Larry Christian at: 800-388-4853 x6509.