February 2004

Lawyers' Fund for Client Protection

The Lawyers' Fund for Client Protection Committee meets quarterly to review applications for gifts from the fund. The committee is authorized to make gifts of up to $10,000 to eligible applicants. On applications for more than $10,000 the committee makes recommendations to the Board of Governors, who are the fund's trustees. At their meeting on November 21, 2003, the committee took the following actions:

Jeffrey R. Bunch (WSBA No. 21790; Spokane; disbarred): Bunch represented the applicant in an industrial insurance claim. A permanent partial disability award of $8,235.96 was paid to Bunch on behalf of the client. Bunch was entitled to 30 percent as his fee. He never paid or accounted to the applicant for the balance of $5,765.19. An audit of Bunch's trust account showed that when he should have held these funds in his trust account, his account balance was zero. The committee approved payment of $5,765.19 to the applicant.

Gregory E. Grahn (WSBA No. 20312; Lakewood; disbarred): Grahn represented the applicant for several years in child custody and support matters. After an adverse ruling in 2001, he advised her to file an appeal. He required payment of $1,500 to pay the costs of transcripts. The applicant made payments totaling $400. She then learned that Grahn had been disbarred. He never refunded the $400 nor provided any accounting for the funds. The committee approved payment of $400 to the applicant.

Trenidad Hernandez (WSBA No. 25849; Federal Way and Yakima; disbarred): The committee previously approved four applications concerning Hernandez. At this meeting, the committee reviewed two additional applications. In the first, Hernan¬dez settled a traffic-accident claim for $11,550. He gave the applicant an accounting that showed payment of a subrogated medical claim of $1,960.62. Hernandez never made that payment or accounted for the funds. The committee approved payment of $1,960.62 to the applicant.

In the second, the applicant paid Hernandez $500 for representation on a DUI charge. Hernandez repeatedly failed to appear at court. After the applicant discharged Hernandez, he never refunded the unearned fee or accounted for its use. The committee approved payment of $500 to the applicant.

Todd H. Hutchinson (WSBA No. 14389; Vancouver; disbarred): In the first matter, the applicant paid Hutchinson $650 to represent her in an eviction matter. Hutch¬inson accepted the fee four days after he had been suspended from practice. A week later — one day before a hearing was scheduled — the applicant was informed by Hutchinson of his suspension. She never heard from him again. The committee approved payment of $650 to the applicant.

In the second matter, the applicant paid Hutchinson $500 to arrange joint custody of his son. After Hutchinson did nothing for six months, the applicant discharged him and requested a refund. In a deposition taken by disciplinary counsel, Hutch¬inson acknowledged he owed $500 to the applicant, and showed counsel a check he said he was mailing to the applicant that day. He never did so or made any refund. The committee approved payment of $500 to the applicant.

Reginald Johnson (WSBA No. 26726; Tacoma; disbarred): The applicant hired Johnson to file a Chapter 7 bankruptcy proceeding. He made two payments: one for $250  and a second for $225, which Johnson accepted three months after he was disbarred. Johnson never filed a bankruptcy petition and never returned the funds. The committee approved payment of $475 to the applicant.

Richard Kyaw (WSBA No. 21312; Tacoma; disbarred): The committee previously approved six applications concerning Kyaw. Three more were approved at this meeting. In the first, the applicant hired Kyaw to probate the estate of his sister. Kyaw distributed the estate assets and said that he was withholding $13,727.14 to pay a subrogated claim to the state of Washington. In fact, there was no subrogated claim and Kyaw never accounted for these funds. The committee recommended payment of $13,727.14 to the applicant, subject to approval by the Board of Governors.

In the second, the applicant hired Kyaw to represent him on criminal charges. During the representation, the applicant paid Kyaw $2,500 in order to hire a detective. Investigation disclosed that the payment to the detective totaled $195. The committee previously approved payment of $700 to the applicant. They approved an additional payment of $1,555 at this meeting.

In the third, the applicant paid Kyaw $1,000 to probate her mother's estate. The applicant was deployed to the Balkans, and when she returned on leave she discovered that Kyaw had done nothing. He promised to send her pleadings to sign. She went back to the Balkans the next day and when she returned again she could not locate Kyaw. Kyaw never accounted for the applicant's funds. The committee approved payment of $1,000.

Kenneth P. Schmidt (WSBA No. 14677; Yakima; disbarred): Schmidt represented the applicant on claims against the Department of Labor and Industries. Schmidt established a trust and set up several bank accounts for the benefit of the applicant. After Schmidt failed to respond to the applicant's request for an accounting, the applicant obtained a new lawyer and Schmidt was removed as trustee. An investigation by the WSBA Office of Disciplinary Counsel account¬ed for all of the applicant's funds except for $400 in proceeds from one Department of Labor and Industries payment. The committee approved payment of $400.

Other business: The committee reviewed 13 additional applications that were denied for lack of evidence of dishonest conduct, or as fee disputes, or claims for malpractice. Two applications were dismissed, as restitution had been made, and two were continued to the next meeting.

Restitution: The fund seeks restitution from the lawyers who cause payments from the fund. Because in most cases those lawyers have no assets, the chief avenue of restitution is through court-ordered restitution in criminal cases. Prosecuting attorneys cooperate with the fund in getting the fund listed in restitution orders. As of November 2003, seven lawyers were making regular restitution payments to the fund.

Thank you's: The purpose of the Lawyers' Fund for Client Protection is to assist persons who have been the victims of dishonest lawyers. Although the fund cannot fully compensate a person for the harm incurred by a dishonest lawyer, the fund receives notes of appreciation to the lawyers of the state of Washington:

"I want to thank the Lawyers' Fund for Client Protection for approving my application. This action goes a long way towards restoring my faith in our judicial system."

"Dear WSBA, thank you so much for your help in this case."

The committee chair is Seattle attorney Wilda Heard. WSBA General Counsel Robert Welden is staff liaison to the committee.