Recent Committee Actions and 2004 Annual Report

August 2004 Committee Meeting

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 trustees. The Committee met on August 20, 2004, and reviewed 106 applications concerning nine lawyers (97 of the applications concerned one lawyer), and approved the following:

Gregory E. Grahn (WSBA #20312; Lakewood; disbarred). Grahn represented the applicant for 10 or 11 years in various child-custody and -support matters. After a several-day trial in 2001 in which custody was awarded to the child's father, Grahn recommended that the applicant file an appeal. The applicant documented payment of fees specifically paid to Grahn for purpose of this appeal in the amount of $1,118.75. During this period, Grahn's law office burned down. After that, when the applicant talked to him, he told her that he was trying to straighten things out after the fire, but he would take care of the appeal. Grahn told her he needed $1,500 to pay for transcripts for the appeal. She paid him $400 toward that cost (the Committee previously approved payment of this amount to the applicant).

When the applicant contacted Grahn's office in the spring of 2003, she learned he had been disbarred. She later talked with another lawyer and learned that an appeal had to have been filed within 90 days. No appeal was filed. The Committee approved additional payment to the applicant of $1,118.75.

Michael J. Harris (WSBA #18240; Tacoma; suspended). (Mr. Harris is to be distinguished from Michael E. Harris and Michael P. Harris of Seattle.) The applicant paid Harris $7,500 as fees to represent her son to appeal a marriage-dissolution decision. Harris filed a Notice of Appeal on September 3, 1996, without proof of service, which was not filed until after the court had moved to dismiss the case. Over the next year, Harris repeatedly failed to meet filing requirements in a timely manner, and sanctions were assessed against him. After granting Harris extensions of time to file the Appellant's Brief, the court dismissed the appeal for failure to file the brief on October 2, 1997. Harris did not advise his client or the applicant of the sanctions or the dismissal.

Over the next year, the applicant and her son repeatedly inquired about the status of the appeal, and Harris told them he was waiting for the opposing party to file his brief. In September 1998 the applicant reviewed the court file and discovered the appeal had been dismissed a year earlier. Harris told the applicant that he knew nothing about the appeal being dismissed, and that the court had made a mistake that he would correct. Thereafter, the applicant called Harris several times and he always told her he had straightened out the appeal. In November 1998, Harris told the applicant that he needed an additional $2,000 to pay for the trial transcripts, which the applicant paid. The Supreme Court ordered restitution to the applicant of $9,500. The Committee approved payment of that amount.

Michael T. Johnson-Ortiz (WSBA #23580; Seattle; disbarred). Michael Johnson-Ortiz maintained a high-volume practice chiefly in the area of immigration. He had one associate who was admitted to the Bar in November 2003. In December 2003, Johnson-Ortiz announced that he was going on vacation to Chile, where his wife's parents live. He said he would be gone January 3 to February 6, 2004. Johnson-Ortiz's staff became increasingly alarmed by the prospect that he would not be returning. The bookkeeper discovered that the firm operating account was overdrawn by about $5,000. There was no provision to pay staff salaries in his absence. On January 9, his staff learned that Johnson-Ortiz had shipped all of his belongings, including his car, to Chile. It was subsequently learned that on December 18, 2003, he had informed his landlord that he would be vacating his offices within 30 days.

Members of Johnson-Ortiz's staff contacted the WSBA. On January 22, 2004, the chair of the Disciplinary Board entered an appointment of counsel to protect Johnson-Ortiz's clients' interests, pursuant to ELC 7.7. The WSBA examined his trust account, which had no funds.

Because of the large number of applications, and the fact that many of the applicants were Spanish-speaking, the WSBA employed a temporary investigator who is a law graduate from the Universidad Nacional de Córdoba, Argentina, who previously worked as a legal assistant with a Seattle law firm in the area of immigration. Based on his investigations, the Committee reviewed 97 applications to the Fund, and approved 60 for payment.

Nearly all of the approved applications concerned failure to return unearned fees when Johnson-Ortiz abandoned his practice. The total amount authorized for payment by the Committee concerning Johnson-Ortiz is $89,440.31. Details regarding individual applications are published in the 2004 Annual Report (see "2004 Annual Report," below).

Richard Kyaw (WSBA #21312; Tacoma; disbarred). (The Committee previously approved eight applications concerning Kyaw totaling $25,527.14.) The applicant's husband died August 14, 1999. He left his wife, a teenage son, and four adult children from a prior marriage. The will named the applicant as personal representative. The applicant is deaf and foreign-born, with limited English-language skills. She hired Kyaw in December 1999 to represent her and the estate. She paid a fee of $2,500. Her contact with Kyaw was "almost at nil." When she was able to talk with Kyaw, he assured her that the matter was being taken care of. However, he did not seek appointment as personal representative until October 26, 2000. When the applicant was unable to contact Kyaw, she contacted the WSBA and learned that Kyaw had been disbarred. With assistance, the applicant was able to locate records showing that on October 27, 2000, Kyaw received $14,620.86 from the deceased's credit-union account, and that on November 27, 2000, he received $12,500 from the sale of the deceased's Alaska commercial-fishing permit. Kyaw never accounted for these funds. A review of the court docket shows that after Kyaw was appointed personal representative on October 26, 2000, there was no further action in the proceeding. The Committee and trustees approved payment of $2,500 to the applicant and $27,120.86 to the estate.

S. Don Phelps (WSBA #21247; Olympia; disbarred). (The Committee previously approved two applications concerning Phelps totaling $750.) The applicant paid Phelps $250 on September 1, 1999, to write a will and prepare a quitclaim deed. She heard nothing further from him, and calls to his office were not returned. In December 2002, the applicant discovered the receipt for her payment to Phelps. She says, "I had forgotten about the retainer and the services to be provided by Mr. Phelps." She wrote requesting a refund and received no response. By that time, Phelps had been convicted of third-degree child molestation and suspended from the practice of law. The Committee approved payment of $250 to the applicant.

Other Business

The Committee reviewed 42 additional applications that were denied as fee disputes or claims for malpractice, or for lack of evidence of dishonest conduct. The Committee also considered a number of issues referred by the Board of Governors in their capacity as Fund trustees. Based on those recommendations, at their meeting on September 17, 2004, the Board of Governors took the following actions:

• Approved the Committee recommendation to increase the per-claim limit from $50,000 to $75,000.
• Accepted the Committee recommendation to make no change in the current restriction on payment of consequential damages.
• Approved the Committee recommendations to recommend to the Supreme Court amendment of the Procedural Rules to (a) give the Committee discretion to approve gifts up to $25,000 without review by the Board of Governors; (b) modify the rule on exhaustion of remedies; and (c) give the Committee as well as the trustees the discretion to waive the three-year time limitation on filing applications.
• Accepted the Committee recommendation that the Fund not be used to pay the costs of custodianships, pursuant to Rule 7.7 of the Rules for Enforcement of Lawyer Conduct. The issue of payment for these custodianships was referred to the WSBA Budget and Audit Committee.

2004 Annual Report

The Lawyers' Fund for Client Protection Committee met four times this fiscal year — November 21, 2003; and February 20, May 14, and August 20, 2004 — to consider 164 applications to the Fund involving 40 lawyers. Eighty-four were approved for payment, totaling $313,721.29. Of the denials, most were deemed to be fee disputes or malpractice claims, or it was determined that there was no evidence of a dishonest taking of funds. During fiscal year 2003, $25,482 in restitution was received by the Fund. The full report is available on the WSBA website at www.wsba.org/lawyers/groups/lawyersfund, or may be obtained by contacting the WSBA office.

The Lawyers' Fund for Client Protection Committee 2003-2004 chair was Seattle attorney Wilda Heard; the 2004-2005 chair is Olympia attorney Jim Connolly. WSBA General Counsel Robert Welden is staff liaison to the Committee.

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