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DuBose says Lockett's order illegal, potentially fraudulent

By Chip Drago
Mobile Bay Times
A south Alabama judge called on a Mobile court to vacate its ruling holding him individually liable for $1.2 million in an estate dispute.

Clarke County Circuit Judge Stuart DuBose contends that Mobile County Circuit Judge John Lockett erred in finding him personally responsible for the judgment because all previous claims were against the estate and never DuBose himself. Lockett employed an option that was not open to him, DuBose asserted.

Furthermore, the judge would have him "commit an illegal act and become involved in the perpetration of a fraud" on any subsequent purchaser of land or timber now in the estate, his motion stated.

"Judge DuBose respectfully declines to do so," added his attorney Jim Rossler in the judge's response.

Lockett last month ruled in a complaint stemming from the  handling of a will and a large estate by DuBose, who was then in a private legal practice.

Wrangling over an estate in which he both drafted the will and was made its executor, DuBose reached a settlement last fall with Ms. Cheryl Weaver, the sole beneficiary of the approximately $2.5 million estate of the late Joseph J. Sullivan.

But distribution of the assets became complicated when the Internal Revenue Service disallowed a deduction which, unresolved, would have major consequences for the size of the estate after taxes.

"The Estate is presently engaged in battle with the IRS in Tax Court over what even Weaver's expert tax consultant has characterized as a legitimate dispute," DuBose's motion states.

In ordering DuBose to transfer assets to Weaver within 30 days, Lockett directs him to act illegally and against the best interests of the estate, the judge's lawyer contends.

Sullivan's longtime friend and caretaker, Weaver approached DuBose to write a will for the ailing and elderly Sullivan. DuBose did so, never having met with Sullivan to discuss it. Ms. Weaver took the will to Sullivan who signed it and died not long afterwards.

Again meeting with DuBose, Weaver agreed to the lawyer receiving a percentage fee of the value of the estate if the will and estate were contested.

First, Sullivan's relatives objected and their grievances were settled out of court.

Next, DuBose and Weaver, now co-executors of the estate, fell out.

In the meantime, DuBose won the Democratic nomination for a seat on the bench of the state's First Judicial Circuit. DuBose defeated Chris Bailey, another Jackson attorney, in a notably rough and nasty campaign. He won by fewer than 100 votes out of 19,000 cast in the heavily Democratic three-county circuit, including Clarke, Choctaw and Washington counties.

The case was removed from Washington County to Mobile County.

Shortly before trial in October, it, too, was settled confidentially, but not before Lockett determined that a $1.2 million legal fee, about 40 percent of the estate's value of $2.5 million, was "reasonable and necessary" and allowed DuBose to continue as the estate's executor.

"Because Weaver only sought a judgment against the Estate, and because the pleadings and evidence would only allow for judgment to be entered against the Estate, the Court erred by entering the judgment against Judge DuBose individually," stated Rossler.

And, in fact, according to arguments in DuBose's behalf, Lockett no longer has jurisdiction over the case which should be returned to probate court for proceedings beyond the settlement of the will contest.

"Several orders (including the one at issue) are "void," according to Rossler's argument in DuBose's behalf.

The whole disagreement would have been "finalized, concluded and released" two years ago if Weaver and her counsel had "acted diligently" by permitting DuBose to make a payment to the IRS, Rossler's motion claims.

"The IRS has previously agreed to accept the sum of $7,000 as final payment on all tax liabilities," the motion states. "Judge DuBose requested permission to make this payment, but that permission was denied and never given."

After DuBose and Weaver reached a settlement, the IRS "reshuffled the deck," according to Rossler.

The estate had taken a deduction on the Estate Return for attorney's fees. With no corresponding payment matching the deduction, the IRS balked.

"All parties agree that if the deduction is allowed, there would be no additional estate tax due," DuBose's motion reads. "All parties further agree that if the deduction is not allowed, there will be 'a very substantial estate tax bill.'"

Tax attorneys involved in the matter point out that if the barring of the deduction stands "then it will not be long before the gross value of the estate will not exceed the amount of tax, interest and penalties due."

"In other words, if the disallowance of the deduction stands then the Internal Revenue Service could take the whole thing," a tax lawyer said.  

In his role as executor, DuBose consulted with two tax lawyers and decided that going to Tax Court was in the best interest of the Estate.

Once the Estate is able to satisfy the IRS that attorney's fees have been paid, the tax deficiency would vanish, resolving the matter, according to the motion.

"It is obvious ...that Judge DuBose has given a great deal of thought and care into how to resolve and settle this case without paying money to the IRS," the judge's attorney stated.

As he advised Lockett in an Aug. 2 hearing, DuBose has not deviated from the plan to gain a closing letter from the IRS in a manner that preserves the estate from a substantial tax bill, his lawyer said.
 
"Judge DuBose is doing the right thing here, and he is acting entirely consistently with everything that was said in court at the hearing on Aug. 2," his lawyer said.

The motion also points out that the judge's order incorrectly refers to a "legal malpractice action" against DuBose. The dispute arises from competing claims against the estate which were "mutually and amicably resolved" last fall, not long before DuBose's ascension to the bench.     

With no GOP opponent on the ballot in last November's general election, the only obstacle to DuBose claiming the judgeship was an anonymous complaint with the Alabama Bar Association over his professional conduct in handling the Sullivan estate.

That threat appeared to be resolved when the the bar accepted his "conditional guilty plea," suspending DuBose's law license for 45 days beginning Nov. 8, the day after the general election when he would formally lay claim to his perch on the 1st Circuit's bench. The suspension would have ended in late December, a few weeks before he took office on Jan. 15.

The settlement allowed DuBose to hold his license to practice law both on Election Day and on the day when he would take the oath-of-office, meeting legal requirements for a candidate and officeholder. 

But the Alabama Supreme Court rejected the deal.

The state's highest court reviews all disciplinary actions taken by the bar against attorneys and approves or rejects the actions. Eight of the court's nine justices found the penalty too lenient.

The bar was directed to revisit the situation with DuBose.

With its unusual if not unprecedented circumstances, the issue remains pending before the bar's disciplinary committee, according to Tony McLain, general counsel for the state bar association.

Can the bar discipline a sitting judge for transgressions committed when he was an attorney in private practice? Does the Judicial Inquiry Commission have jurisdiction over the actions of a judge before he takes the bench?

In the interim, DuBose has taken the oath of office and assumed the duties of a circuit judge.

In his order against Sullivan's estate and "Stuart DuBose, individually, jointly and severally" for $1.19 million, Lockett wrote:

"The court will not recite the troubled history that gets us to this point. Suffice it to say that on Oct. 2, 2006, on the date this matter was set for trial, the parties announced they had reached a settlement of their disputes and read into the record a settlement agreement. Now, 10 months later, the matter is not resolved ..."

Dubose's attempt on Aug. 3 to honor the agreement with Weaver "purports to split the real property," but is contrary to the agreement and "due to be set aside," Lockett ruled.

Lockett imposed a lien on property that was to be conveyed to Weaver, including:


Lockett gave DuBose 30 days to transfer ownership of the property to Weaver.

Further, the judge directed DuBose to "take all necessary steps to ensure that the conveyances ... are free from any encumbrance or lien of the IRS as pursuant to the
settlement agreement 'Stuart is responsible for the IRS.'”
 
The court misstated and misinterpreted the settlement agreement which contains a statement that DuBose is responsible "to" the IRS, not "for."

That was merely an indication that DuBose would continue administrative work in dealing with the IRS, "not that he would pay any estate taxes that might come due," the motion reads.

Weaver's attorneys -- Pete Burns of Burns, Cunningham and Mackey in Mobile and Topie Cassady of Cassady & Cassady, with offices in Fairhope and Evergreen -- pressed the issue with Lockett after DuBose took actions with property in the estate that they contended were in conflict with terms of the settlement.

DuBose is also involved in another lawsuit that has attracted media attention.

DuBose has sued La-Z-Boy contending that he was injured and greatly disabled while trying to sit in a faulty recliner. The case is pending.