July 2003
Disciplinary Notices
These notices of imposition of disciplinary sanctions and actions are published pursuant to Rule 3.5(d) of the Washington State Supreme Court Rules for Enforcement of Lawyer Conduct, and pursuant to the February 18, 1995, policy statement of the WSBA Board of Governors.
For a complete copy of any disciplinary decision, call the Washington State Disciplinary Board at 206-733-5926, leaving the case name, and your name and address.
Disbarred
George W. Cody (WSBA No. 6582, admitted 1976), of Lynnwood, was disbarred, following a stipulation, by order of the Supreme Court, effective May 29, 2002. Mr. Cody stipulated that these facts would likely be proven at hearing. This discipline is based on his theft of client funds in 2000 and 2001.
Matter 1: In September 2000, Mr. Cody agreed to represent the husband in a marital-dissolution action. During the case, the parties sold their home. Mr. Cody agreed to hold the sale proceeds in his trust account until the parties settled the property issues. In February 2001, Mr. Cody received the client's $175,037. By this date, Mr. Cody had spent $40,000 of the parties' money for his own purposes. In March 2001, the court issued an order freezing the funds. Later, the court ordered Mr. Cody to repay $40,000 and transfer the remaining funds to the client's new lawyer.
Matter 2: In May 1991, Mr. Cody agreed to represent three clients in a lawsuit. The clients signed a written contingent-fee agreement providing a 25 percent fee for settlement prior to trial. The parties settled the suit prior to trial for $25,000. By 1996, Mr. Cody had used all but $506.54 of the clients' money for his own purposes. Mr. Cody suggested that the clients leave their money with him until the statute of limitations on any attorney's-fee claim from opposing counsel had expired. In June 2000, Mr. Cody told the clients that their account balance was $26,376.
In August and October 2000, the clients provided Mr. Cody with written disbursement instructions, but Mr. Cody did not disburse their money. He provided them with false bank statements. In January 2001, Mr. Cody gave two of the clients a cashier's check for $23,002 from one trust account. Later that same day, Mr. Cody gave the clients the $554 remaining in the initial trust account. Also on this day, Mr. Cody issued a $4,000 check to the third client from a third trust account.
Mr. Cody's conduct violated RPCs 8.4(b), prohibiting committing a criminal act that reflects adversely on a lawyer's honesty, trustworthiness, or fitness as a lawyer in other respects; 8.4(c), prohibiting conduct involving dishonesty, fraud, deceit, or misrepresentation; 1.14(a), requiring lawyers to deposit and maintain client funds in a trust account; and 1.14(b)(3), requiring lawyers to maintain complete and accurate records of client funds and render appropriate accountings.
Marsha Matsumoto represented the Bar Association. David Allen represented Mr. Cody.
Disbarred
Michael S. McAllister (WSBA No. 22279, admitted 1992), of Spanaway, was disbarred, following a hearing, by order of the Supreme Court, effective August 22, 2002. This discipline is based on his failure to comply with stipulated probation conditions imposed following a disciplinary matter in 1998.
On March 11, 1998, the Supreme Court approved Mr. McAllister's stipulation to an 18-month suspension, followed by two years' probation. The probation conditions included requiring Mr. McAllister to obey all laws; abstain from possession, use, or consumption of alcohol and/or controlled substances; and continue substance-abuse treatment. On February 23, 1999, Mr. McAllister entered a deferred prosecution on charges of driving under the influence of intoxicants, reckless driving, and hit and run. Mr. McAllister was reinstated to active practice on September 22, 1999.
From November 1999 through the end of the probationary period, Mr. McAllister failed to attend his treatment appointments. In May 2000, Mr. McAllister was charged with driving under the influence of intoxicants, reckless driving, and failing to obey a police officer. He entered a guilty plea on these charges in February 2001. In May 2001, Mr. McAllister's deferred prosecution on the earlier charges was revoked, and the court found him guilty of those offenses.
Mr. McAllister's conduct violated RLDs 5.2, authorizing probation conditions; and 1.1(a), prohibiting committing acts evidencing disregard for the rule of law.
Kevin Bank represented the Bar Association. Mr. McAllister represented himself. The hearing officer was Thomas Cena.
Disbarred
Jeffrey R. Bunch (WSBA No. 21790, admitted 1992), of Spokane, was disbarred, following a stipulation, by order of the Supreme Court, effective October 29, 2002. Mr. Bunch did not admit the allegations, but agreed that there is a substantial likelihood that these facts would be proven at hearing. This discipline is based on his failure to protect client funds, and engaging in criminal acts and dishonest conduct in 2000 and 2001.
Between February 29, 2000, and December 31, 2001, Mr. Bunch withdrew $63,489.30 from his trust account to which he was not entitled. Between January 2000 and July 9, 2001, he withdrew $16,000 from his trust account to satisfy a Department of Labor and Industries lien claim. During this time, Mr. Bunch also allowed earned fees to accumulate in his trust account and deposited his own funds into his trust account. By January 24, 2002, when the balance in Mr. Bunch's trust account was zero, $21,359.68 in client funds was missing. Mr. Bunch did not have a meaningful system to reconcile his trust account and did not keep client ledgers.
Mr. Bunch's conduct violated RPCs 1.14, requiring lawyers to place client funds in an interest-bearing account, keep client funds separate from the lawyer's funds, and maintain complete records of these client funds; 8.4(b), prohibiting lawyers from committing criminal acts that reflect adversely on the lawyer's honesty, trustworthiness, or fitness as a lawyer in other respects; and 8.4 (c), prohibiting conduct involving dishonesty, fraud, deceit, or misrepresentation.
Leslie Allen represented the Bar Association. Mr. Bunch represented himself.
Disbarred
Terry Deglow (WSBA No. 13357, admitted 1983), of Spokane, was disbarred, following a default hearing, by order of the Supreme Court, effective September 9, 2002. This discipline is based on his failure to protect client funds, to diligently represent a client, to protect the client's interest upon withdrawal, to notify the client when his license was suspended, and committing a criminal act, from 1995 through 2000.
In 1994, Mr. Deglow agreed to represent a client in the probate of the client's brother's estate. Mr. Deglow did not fully explain his fees or prepare a written fee agreement. The client surrendered a $5,000 life-insurance policy to Mr. Deglow to pay the estate's debts. Mr. Deglow did not work on the estate from April 1995 through 2000.
On July 10, 2000, Mr. Deglow's license to practice law was suspended. On July 14, Mr. Deglow told the client that he had paid the estate's back-due child support and was closing his practice. He did not tell the client about his license suspension. Mr. Deglow reimbursed the client for $1,600 in burial expenses. At this time, Mr. Deglow's trust account did not contain enough funds to cover the remainder of the insurance-policy proceeds. Later in July 2000, the client retained another lawyer to close the estate. Mr. Deglow did not sign the substitution of counsel pleading or forward the remaining estate funds. Mr. Deglow failed to cooperate with disciplinary counsel's investigation of this matter.
Mr. Deglow's conduct violated RPCs 1.3, requiring lawyers to act with reasonable diligence and promptness in representing clients; 1.4, requiring lawyers to keep their clients reasonably informed about the status of their matters and promptly comply with reasonable requests for information; 1.15(d), requiring lawyers to take reasonable steps to protect clients' interests upon withdrawal; 1.14(b)(3), requiring lawyers to maintain complete records of client trust funds; and 8.4(b), prohibiting committing criminal acts that reflect adversely on a lawyer's honesty, trustworthiness, or fitness as a lawyer in other respects; and RLD 8.1(a), requiring lawyers to notify their clients when their license to practice law is suspended.
Sachia Stonefeld Powell represented the Bar Association. Mr. Deglow represented himself. The hearing officer was Dennis W. Morgan.
Suspended
Carl J. Gaul II (WSBA No. 8341, admitted 1978), of Everett, was suspended for 60 days, following a hearing, by order of the Supreme Court, effective August 15, 2002. Mr. Gaul was reinstated to active practice on October 16, 2002. This discipline was based on a conflict of interest, and failure to properly protect and disburse client funds in 1993.
In 1993, Mr. Gaul represented Mr. and Mrs. P. The Ps wanted to sell their house, but because the house was on registered land, the sale could not close until Mr. P's first wife's estate had been probated. Some of Mr. P's sons wanted to appoint a guardian for Mr. P and replace him as personal representative of his first wife's estate. Although Mr. Gaul did not prepare a written fee agreement, he told the clients that the case would cost around $20,000. Between July 1993 and January 1994, the clients paid Mr. Gaul $15,600.
During this time, Mr. Gaul learned that the clients owned undeveloped property on a creek. In August 1994, the house sale closed and the clients asked Mr. Gaul to deposit their $44,452 check into an interest-bearing account for them. Mr. Gaul misplaced the clients' check for about a month and then deposited it into his trust account with the notation "estate payment hold." From August 1993 through April 1994, Mr. Gaul did not explain that Mr. P could have immediate access to this money and that it did not need to remain in his trust account.
In spring 1994, the clients decided to move to California and asked Mr. Gaul to release their funds. Mr. Gaul stated that he would release the funds if the clients secured his fees with a deed of trust on the creek property. The clients did not authorize Mr. Gaul to use the sale proceeds for his attorney's fees, but agreed to Mr. Gaul's request for the deed of trust on their undeveloped property because they needed their money to close the sale of a house in California. Mr. Gaul prepared the deed of trust. The deed referenced the entire undivided five acres of property, and secured payment of current and future fees. Mr. Gaul did not advise the clients to seek independent legal advice prior to signing the deed of trust. After the clients signed it, Mr. Gaul released all but $3,000 of their funds. He retained this amount for ongoing attorney's fees.
In December 1993, Mr. Gaul filed a third-party complaint against one of the son's lawyers. The court dismissed the complaint and imposed $2,500 in terms against Mr. Gaul personally. Mr. Gaul told the clients that they should pay the terms and that he would use the funds remaining in the trust account to make the payment. The clients objected. Mr. Gaul paid the terms with the clients' money despite their objections.
Mr. Gaul's conduct violated RPCs 1.14(a), requiring lawyers to deposit and maintain client funds in a trust account and keep complete records of client funds, and prohibiting commingling a lawyer's personal funds with client funds; 1.14(b) (2), requiring lawyers to safeguard client property; 1.14(b)(4), requiring lawyers to promptly deliver client funds to the client upon request; 1.8(a), prohibiting entering a business transaction with the client unless the transaction terms are fair, reasonable, and fully disclosed in writing to the client; the client is given a reasonable opportunity to seek independent counsel; and the client consents; and 1.4, requiring lawyers to explain matters to the extent necessary for clients to make informed decisions regarding the representation.
Marsha Matsumoto and Kevin Bank represented the Bar Association. Leland Ripley represented Mr. Gaul. The hearing officer was Mark Wheeler.
Suspended
David M. Lux (WSBA No. 24581, admitted 1995), formerly of Kirkland, was suspended for 60 days, following a stipulation, by order of the Supreme Court, effective December 17, 2002. This discipline was based on his failure to diligently represent three clients, failure to refund unearned fees, and dishonest conduct, in 2000 and 2001.
Matter 1: In September 2000, Mr. Lux agreed to represent a client in a chapter 13 bankruptcy matter. On September 18, the client paid Mr. Lux a nonrefundable flat fee. After September 28, Mr. Lux sent the client bankruptcy forms to complete. The client called for advice on how to fill out the form, but Mr. Lux did not return his calls.
In March 2001, the client retained substitute counsel to complete his bankruptcy. On March 26, Mr. Lux sent the client a letter informing him that Mr. Lux had transferred the client's case to another lawyer. The client responded that he had hired a different lawyer and wanted a full refund of his fees. Mr. Lux did not refund the client's fees. Mr. Lux's paralegal stated that Mr. Lux had told her to make untrue statements to disciplinary counsel during the investigation of this matter.
Matter 2: In October 2000, Mr. Lux agreed to handle a chapter 7 bankruptcy for a client. The client paid a nonrefundable flat fee. Mr. Lux told the client he would contact her creditors and ask them to wait for the bankruptcy; however, he did not do so. From October through December 2000, Mr. Lux took no action on the client's case and failed to answer her phone calls. In January 2001, the client was incarcerated and provided Mr. Lux with a power of attorney, authorizing her mother to work on the bankruptcy matter. Mr. Lux did not file the client's bankruptcy. On April 25, 2001, the client fired Mr. Lux and demanded a refund. Mr. Lux did not refund the client's fees.
Matter 3: In January 2001, Mr. Lux agreed to represent the mother in a child residential-placement matter. On January 18, the parties met for a settlement conference. The next day, the client fired Mr. Lux. Mr. Lux did not tell opposing counsel that he no longer represented the father, and she sent him final draft documents. Mr. Lux told opposing counsel that the mother was having second thoughts about the settlement. Opposing counsel set a deposition date for the mother and suggested that the case be set for trial. Mr. Lux took no further action. On September 10, 2001, the court authorized opposing counsel to contact Mr. Lux's client. The client appeared and the case was settled.
Mr. Lux's conduct violated RPCs 1.3 and 3.2, requiring lawyers to diligently represent their clients and to expedite litigation; 1.4, requiring lawyers to keep their clients reasonably informed about the status of their matters; 1.15, requiring lawyers to withdraw from representation when asked to do so by the client; 1.5(a) and 1.15(d), requiring lawyers to charge reasonable fees and to refund unearned advance fee deposits upon withdrawal; and 8.4(c), prohibiting conduct involving dishonesty, fraud, deceit, or misrepresentation.
Anthony Butler represented the Bar Association. Mr. Lux represented himself.
Suspended
James R. McLees (WSBA No. 2785, admitted 1962), of Sumner, was suspended for two years, following a stipulation, by order of the Supreme Court, effective July 2, 2002. Mr. McLees agreed to submit his resignation to the WSBA and never apply to return to active status. This discipline is based on his failure to properly account for and deliver client funds in 1992.
In 1989, Mr. McLees agreed to represent a client in a personal-injury claim and the related Labor and Industries (L&I) matter. In June 1991, Mr. McLees filed the client's personal-injury lawsuit. He did little work on the L&I matter. L&I paid time loss to the client, and then made a partial permanent disability (PPD) payment. Between April and December 1992, Mr. McLees deposited the client's PPD payments into his trust account and withdrew the funds. Mr. McLees did not advise his client that he had received the checks or withdrawn the funds.
In December 1992, the client settled the personal-injury lawsuit. Mr. McLees paid himself more than the agreed amount in attorney's fees. In 1996, the client learned that Mr. McLees had received the client's L&I payments. The client filed a civil lawsuit and received a $21,817.65 judgment against Mr. McLees. At the time of the stipulation, Mr. McLees had paid only $78.83 of the judgment.
Mr. McLees's conduct violated RPCs 1.14, requiring lawyers to notify clients upon receipt of client funds, render appropriate accountings, and promptly deliver client funds upon request; 1.5, requiring lawyers to charge reasonable fees; 8.4(c), prohibiting conduct involving dishonesty, fraud, deceit, or misrepresentation; and 1.4, requiring lawyers to keep their clients reasonably informed about the status of their matters.
Gilbert Stratton and Joanne Abelson represented the Bar Association. Kurt Bulmer represented Mr. McLees.
Suspended
John O. McLendon (WSBA No. 1187, admitted 1969), of Spokane, was suspended for 60 days, following a stipulation, by order of the Supreme Court, effective September 9, 2002. Mr. McLendon was disbarred prior to the effective date of this suspension. This discipline was based on his failure to comply with a prior disciplinary order.
In 1993, the Supreme Court imposed restitution as part of a disciplinary sanction. The Court required Mr. McLendon to enter into a payment plan as part of his reinstatement to active status. Mr. McLendon was reinstated to active status in April 1993.
Between March and early December 1993, the Office of Disciplinary Counsel (ODC) sent Mr. McLendon several letters proposing payment plans and asking for more information. Mr. McLendon failed to respond, so ODC opened a new disciplinary proceeding based on failure to comply with the court order requiring agreement to a payment plan.
After the new disciplinary proceeding had been initiated, Mr. McLendon agreed to a payment plan requiring $500 minimum monthly payments to the victims listed in the restitution agreement. The agreement did not indicate how the payments should be allocated among the victims. The separate criminal proceeding in Spokane Superior Court obliged Mr. McLendon to make restitution of $101,984.27 to five victims. Additionally, some of the victims also obtained separate civil judgments against Mr. McLendon. The victims in the disciplinary proceeding, criminal proceeding, and civil proceeding were not identical. As of February 18, 1993, Mr. McLendon owed $152,395 to the victims listed in the disciplinary proceeding.
Between January 1994 and March 2000, Mr. McLendon did not pay a minimum of $500 each month, but the average of all payments over that time was slightly over $500 per month. The hearing officer found that Mr. McLendon willfully failed to make the required minimum payments and provide the required periodic income reporting to ODC. Mr. McLendon intentionally handled a significant portion of his business on a cash basis and failed to keep records of this business to avoid the reporting requirements.
Mr. McLendon did not distribute the restitution payments to the victims pro rata. He paid the victims who had criminal or civil orders, and others who threatened litigation. Some victims received no payments.
Mr. McLendon's conduct violated RLD 5.3(c), stating that failure to make restitution payments when ordered may constitute grounds for discipline.
Christine Gray represented the Bar Association. Dustin Deissner represented Mr. McLendon at hearing. F. Lawrence Taylor Jr. represented Mr. McLendon on appeal. The hearing officer was Diehl Rettig.
Suspended
W. Russell Van Camp (WSBA No. 5385, admitted 1973), of Spokane, was suspended for six months, following a hearing, by order of the Supreme Court, effective August 22, 2002. Mr. Van Camp was reinstated to active practice on February 24, 2003. This discipline was based on his making a false statement to the bankruptcy tribunal in 1994.
In 1994, Mr. Van Camp was involved in litigation with the Internal Revenue Service (IRS). In October 1994, the IRS threatened to levy some of Mr. Van Camp's clients. Mr. Van Camp filed a chapter 11 bankruptcy petition, to avoid the IRS levy. Although Mr. Van Camp's residence and law practice were in Spokane, he listed his address in the bankruptcy petition as Denver, Colorado. Additionally, Mr. Van Camp did not include all of his assets on the bankruptcy schedules. In October, the bankruptcy trustee's attorney filed a motion to dismiss Mr. Van Camp's bankruptcy for improper venue, and incomplete or deficient schedules.
In November 1994, Mr. Van Camp filed an objection to the motion and requested a hearing. During the February 1995 hearing, the testimony established that the Colorado address on the bankruptcy petition was for Mail Boxes, Inc., that Mr. Van Camp was married, and that both assets and debts were missing from the schedules. The bankruptcy trustee agreed to a change in venue to the District of Eastern Washington. In June 1995, the bankruptcy court granted Mr. Van Camp's motion to dismiss his petition. The trustee referred the matter to the U.S. Attorney's Office in Colorado for possible "bankruptcy fraud." The U.S. attorney did not prosecute.
Mr. Van Camp's conduct violated RPCs 3.1, prohibiting lawyers from filing frivolous claims; 3.3, prohibiting lawyers from knowingly making false statements of material fact or law to the tribunal; and 8.4(c), prohibiting conduct involving dishonesty, fraud, deceit, or misrepresentation.
Jean McElroy represented the Bar Association. F. Lawrence Taylor Jr. represented Mr. Van Camp. The hearing officer was Dennis W. Morgan.
Reprimanded
F. Michael Kovach (WSBA No.16788, admitted 1987), of Bellevue, received a reprimand on July 26, 2002, following a hearing. This discipline was based on revealing his client's secrets or confidences, and failing to avoid conflicts of interest in 1998.
In 1993, Mr. Kovach agreed to represent a client in a dispute with the Internal Revenue Service (IRS). Mr. Kovach negotiated a payment agreement for a portion of the client's debt, and advised the client that his remaining debt would be eligible for bankruptcy after August 15, 1997. Mr. Kovach was concerned about the client's sporadic, but substantial, real estate broker commissions, so he advised the client to quit and obtain a more traditional, lower-wage position.
On June 25, 1997, the client told Mr. Kovach that the client had already earned $100,000 and expected another $200,000 in real estate commissions in the next six months. On July 17, the client paid Mr. Kovach $1,200 in fees for the bankruptcy, but still owed Mr. Kovach's firm $9,000 that could be discharged in the bankruptcy. In January 1998, the client retained a second lawyer to assist in the representation. Mr. Kovach withdrew from the representation, asserted an attorney's lien on the client's files, and drafted a confession of judgment for the client's signature. The confession of judgment included the following paragraph: "The firm has extended me credit based on financial statements
. . . that were materially false regarding my ability to pay these fees, but on which the law firm reasonably relied. I prepared and submitted these statements to them with the intent to deceive them and to cause them to carry my account until such time as I could declare bankruptcy and discharge their debt." Mr. Kovach's statement was intended to prevent the client from discharging the firm's debt in the bankruptcy. The client refused to sign the confession of judgment.
In February 1998, Mr. Kovach filed a civil complaint against the client in the law firm's name, alleging breach of contract and fraud. The complaint included the income information the client provided Mr. Kovach during the June 25, 1997, meeting. By including this information in the complaint, Mr. Kovach revealed the client's secrets and confidences. Mr. Kovach did not file the complaint under seal.
Mr. Kovach's conduct violated RPC 1.6, prohibiting lawyers from revealing client secrets and confidences relating to representation unless the client consents after full disclosure; and 1.7(b), prohibiting a lawyer from representing a client if the representation may be materially limited by the lawyer's own interests.
Peter Ehrlichman, Andrew Carter, and Joanne Abelson represented the Bar Association. Kurt Bulmer represented Mr. Kovach. The hearing officer was Geoffrey Revelle.
Censured
Rolfy DeDamm (WSBA No. 20476, admitted 1991), of Snohomish (formerly of Bellevue), received a censure on December 18, 2002, based on a stipulation approved by the Disciplinary Board. This discipline was based on his filing, and failing to release, an inappropriate lien from 2000 through 2001.
In July 1999, a client retained the DeDamm law firm to represent him in a rape investigation. The client was engaged to the victim's mother and was purchasing a home with her. On July 27, 1999, the home purchase closed and on August 12, the client quitclaimed all interest in the property to the victim's mother. Later, the engagement was called off. On March 22, 2000, the firm filed a notice of attorney lien against the home for the client's $58,675.64 in unpaid attorney's fees. Mr. DeDamm believed that the client had an interest in the property, but did not confirm this prior to signing the lien. The client was convicted and sentenced to life in prison. Mr. DeDamm learned of the quitclaim deed shortly after the July 2000 sentencing hearing.
In March 2001, another lawyer wrote to Mr. DeDamm requesting that the lien be released. In April, the mother filed a grievance against Mr. DeDamm. Mr. DeDamm took no action to release the lien until after the civil suit had settled and the mother had agreed to drop the grievance. Mr. DeDamm was not aware that the attorney-lien statute does not allow liens on real property.
Mr. DeDamm's conduct violated RPCs 3.1, prohibiting lawyers from bringing a proceeding unless there is a nonfrivolous basis for doing so; 4.4, prohibiting using means that have no purpose other than to embarrass, delay, or burden a third person; and 8.4(d), prohibiting conduct prejudicial to the administration of justice.
Sachia Stonefeld Powell represented the Bar Association. Mr. DeDamm represented himself.
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