Ferguson

FACTS AND PROCEDURAL HISTORY

In the 1980’s, Allyn and Joline bought a flat in London overlooking Hyde Park for approximately $200,000, and put title to the property in the Wellington Trust (Trust). In the early 1990’s, the Federal Deposit Insurance Corporation (FDIC) sought to collect $2 million from Allyn and three others who had guaranteed a loan made to a music school. Allyn hired Yaspan, an attorney, to represent him. The FDIC agreed to settle for $800,000, with $200,000 coming from each guarantor, but Allyn did not have that amount available. Allyn’s accountant, who was also one of the guarantors, loaned Allyn the money, secured by a $210,000 note interest in the flat (the Note). Yaspan continued to represented Allyn with respect to the FDIC through 1999. In 1995, Allyn approached Yaspan with a business deal. Yaspan and his wife would become 50 percent co-owners of the Trust with Allyn and Joline; in exchange, the Yaspans would assume half of the Note and pay Allyn the equivalent of $200,000. This proposal enabled the Fergusons to recover nearly all of their original purchase price for the flat and still own half of it. Both the Fergusons and the Yaspans wanted to be…