## Facts

- Paul T. Crary, a North Dakota lawyer admitted in 1965, was retained by Mary Harris, an 85-year-old woman, to prepare estate-planning documents.
- Harris executed a will drafted by Crary and also granted Crary power of attorney.
- Crary and his wife developed an ongoing, trust-based relationship with Harris, regularly assisting her with daily needs and medical appointments over roughly two and one-half years.
- Crary drafted a codicil providing that Crary’s wife would receive one-half of insurance-related estate proceeds (including annuities and life insurance) and a grandfather clock.
- Harris sought investment assistance; Crary helped her purchase multiple annuities from the Independent Order of Foresters (IOF), including a $42,000 annuity and a $10,000 annuity, and later helped liquidate another annuity to fund a $90,000 IOF annuity.
- Crary acted as an IOF agent and received commissions from Harris’s annuity purchases, but did not disclose to Harris that he was an agent or that he was paid commissions.
- Harris gave Crary a $3,500 check labeled as a “loan” for a computer; Crary later characterized it as a gift, but the hearing panel found it was a loan.
- Crary did not provide written disclosures, advise Harris in writing to seek independent counsel, or obtain informed written consent regarding the loan or his conflicted financial role in the annuity transactions.
- A disciplinary hearing panel found violations of the North Dakota Rules of Professional Conduct and recommended disbarment, restitution to Harris, and assessment of costs; Crary did not file a brief opposing the recommendation in the Supreme Court.

## Issues

1. Whether clear and convincing evidence established that Crary violated N.D.R. Prof. Conduct 1.8(a), 1.8(b), and 1.8(c) through a client loan, undisclosed commission-based annuity sales tied to the attorney-client relationship, and drafting a substantial testamentary gift to his wife.
2. What sanction was appropriate given the client’s vulnerability, the nature of the conflicts, and the pattern of self-interested conduct.

## Decision

- The Supreme Court of North Dakota reviewed the matter de novo on the record, giving due weight to the hearing panel’s findings.
- The Court adopted the hearing panel’s findings and recommendations.
- The Court ordered Crary disbarred from the practice of law in North Dakota.
- The Court ordered Crary to pay restitution to Harris.
- The Court assessed the costs of the disciplinary proceedings against Crary.

## Legal Principles

- In attorney discipline matters, alleged rule violations must be proven by clear and convincing evidence.
- The Supreme Court reviews disciplinary proceedings de novo on the record, giving due weight to a hearing panel’s findings but independently determining rule violations and sanctions.
- A lawyer may not enter a business transaction with a client or acquire an interest adverse to a client unless the transaction is fair and reasonable, fully disclosed in writing, the client is advised in writing of the desirability of independent counsel, and the client gives informed written consent. (Rule 1.8(a))
- A lawyer may not use information relating to representation to the disadvantage of the client without informed consent; undisclosed personal profit derived from client financial decisions steered through the attorney-client relationship violates this duty. (Rule 1.8(b))
- A lawyer may not prepare an instrument giving the lawyer or a close relative a substantial gift from a client unless the client is related to the recipient. (Rule 1.8(c))
- Severe sanctions, including disbarment, are warranted when a lawyer exploits a vulnerable client through undisclosed conflicts and self-dealing inconsistent with fiduciary duties.

## Conclusion

The court disbarred Crary and ordered restitution and costs after finding, by clear and convincing evidence, that he engaged in self-interested transactions with an elderly client, failed to disclose commission-based conflicts in annuity sales connected to the representation, and drafted a codicil giving a substantial benefit to his wife in violation of Rule 1.8.


In re Disciplinary Action Against Crary, 2002 ND 9, 638 N.W.2d 23 (N.D. 2002)