July 05

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 $25,000 to eligible applicants. On applications for more than $25,000, the Committee makes recommendations to the Board of Governors, who are the fund’s trustees. At their meeting on May 20, 2005, the Committee took the following action:

David A. Ambrose (WSBA No. 21764; Edgewood; suspended): Ambrose stipulated to a two-year suspension. The conditions for reinstatement to practice include restitution to various parties. (Mr. Ambrose is to be distinguished from David R. Ambrose of Portland.)

Applicant A: Applicant hired Mr. Ambrose to represent him in seeking a parenting plan regarding his eight-year-old daughter. Applicant’s mother paid Mr. Ambrose $1,800 on behalf of her son. Mr. Ambrose prepared a draft parenting plan, but when Applicant reviewed it, he found that it was full of inaccuracies and spelling errors, and was incomplete. After a few weeks, Mr. Ambrose would not return Applicant’s phone calls and did not open his door when Applicant went to his office. Applicant wrote Ambrose to demand that he either finish the work or refund the $1,800. He received no response. Finally, Mr. Ambrose left a message that Applicant could pick up his file. Applicant went to Mr. Ambrose’s office and received an envelope with his file and a handwritten note from Mr. Ambrose stating that Applicant had failed to decide on a “single, integrated strategy” and that “THE MOTHER NEEDS AT LEAST A STERN TALKING TO BY SOMEONE” [sic]. He received no refund or accounting. In his stipulation, Mr. Ambrose agreed to pay $1,800 to Applicant’s mother. The Committee approved payment of that amount.

Applicant B: Applicants hired Mr. Ambrose for representation in a family real estate dispute. They paid him $2,900 in fees and costs. Mr. Ambrose filed a lawsuit on behalf of Applicants, but after that, he did little work. He did not respond to discovery requests until the defendants moved for sanctions. He cancelled scheduled depositions. On the scheduled date for trial, he filed an untimely motion for a new judge. Even though it was untimely, the judge chose not to proceed. Mr. Ambrose agreed to arbitrate the claim but took no steps to do so. Mr. Ambrose stipulated that although he did not work on Applicants’ case after December 2003, between December 12, 2003, and September 17, 2004, he collected an additional $2,200 in fees from them. He stipulated to $2,200 restitution, and the Committee approved payment in that amount.

Applicant C: Applicants hired Mr. Ambrose to represent them regarding a dispute with neighbors regarding a road easement over Applicants’ property. They made fee payments totaling $9,645 plus $112 to pay cost of service. Before Mr. Ambrose filed suit, the neighbors filed against Applicants. They filed a motion for order of default, which was granted. Mr. Ambrose then filed a notice of appearance. According to the lawyer for the neighbors, he had only one telephone conversation with Mr. Ambrose who told him that he did not have an office at his mailing address, and gave no other contact information. Mr. Ambrose appeared in court one time when the order of default was set aside by agreement of the parties. He never filed an answer to the complaint, and the trial judge entered a default judgment against Applicants. Mr. Ambrose then told Applicants that he would sue the neighbors. Applicants paid him an additional $2,000. Ambrose did nothing further on their case. The Committee approved payment of $10,757.

Applicant D: Applicants hired Mr. Ambrose to file suit against the builder of their home over defective siding. They paid him $1,500 and filing and service fees. Mr. Ambrose drafted a complaint which was reviewed and agreed to by the Applicants, but Mr. Ambrose says that on the day that he was prepared to file and serve the complaint, he checked with the Office of the Secretary of State and discovered that the defendant had voluntarily dissolved. As a result, he did not file the complaint. After that, there were communications between Applicants and Mr. Ambrose. In the disciplinary investigation, Ambrose asserted that he fully earned the $1,500 fee. He did not, however, account for or refund the filing and service fees totaling $145. The Committee approved payment of $145 and denied the balance of Applicants’ application, because it is a fee dispute that the Fund Committee cannot resolve.

John M. Cooper (WSBA No. 22977; College Place; suspended): Mr. Cooper asserted during disciplinary proceedings that he was mentally incapacitated and unable to defend himself. Supplemental disability proceedings were ordered, and Mr. Cooper was ordered to sign waivers to allow disclosure of his medical records. He did not do so. The hearing officer found that a lawyer asserting incapacity has the burden of proving incapacity, and that Mr. Cooper failed to do so. Therefore, the disability proceeding was dismissed and the disciplinary proceeding was resumed. Mr. Cooper also never filed an answer to the disciplinary complaint, and an order of default has been entered. (Mr. Cooper is to be distinguished from John G. Cooper of Seattle and John M. Cooper of Bainbridge Island.)

Applicant hired Mr. Cooper to probate her mother’s estate. She paid him $250 at that time. The estate was valued at approximately $50,000, consisting mainly of the house Applicant’s mother owned and in which Applicant lived. There were also numerous creditors’ claims. Mr. Cooper recommended that she take out a mortgage to raise $5,000 to pay the creditors. Applicant gave Mr. Cooper a cashier’s check for $5,750. $750 was an advance fee payment to Mr. Cooper, and $5,000 was to be used to pay creditors, with any remaining balance to be refunded to Applicant. Applicant contacted Mr. Cooper periodically, and he assured her everything was fine. However, soon he stopped returning phone calls, and creditors began contacting Applicant because their claims had not been paid.

Applicant and her husband confronted Mr. Cooper at his home. During that meeting, Cooper gave Applicant a trust account check for $3,010, and a promissory note for the balance of fees and costs plus interest, plus $2,000 “to make matters right.” He has made no payments on the note.

The disciplinary examination of Mr. Cooper’s trust account showed that after he deposited Applicant’s check into his trust account, he used her funds to pay the expenses of other clients and to make cash withdrawals. His payment of $3,010 to Applicant from the trust account depleted the account. The Committee approved payment to Applicant of $2,990, representing the $6,000 paid in fees and costs, less the $3,010 repayment.

Robert C. Lyons (WSBA No. 22275; Spanaway; disbarred): The Committee previously paid two applications regarding Mr. Lyons. Applicant hired Mr. Lyons to seek custody of his 14-year-old son. Applicant paid Lyons $2,500. Mr. Lyons never filed any petition or took other action on his behalf. After Mr. Lyons closed his office and disappeared, Applicant says that he was able to reach Mr. Lyons’s former secretary who said, “good luck finding him.” The Committee approved payment of $2,500.

Oleg Ordinartsev (WSBA No. 27574; Bothell; suspended): Mr. Ordinartsev had represented Applicants for approximately three years in connection with construction companies they owned. According to Mr. Ordinartsev, he was aware that they had financial difficulties with their businesses. Mr. Ordinartsev had another client who was involved in caviar production and distribution. Mr. Ordinartsev agreed to stop taking new clients in order to wind down his private practice and work full-time for this client and his caviar businesses. During a meeting at his office, Applicants were introduced to Mr. Ordinartsev’s caviar-business clients. As events ensued, Applicants decided to invest in the caviar business. Mr. Ordinartsev did not advise Applicants to seek independent counsel, and he did not advise Applicants of the conflicts of interest he had in being involved in a transaction where one client would invest in another client’s business. He also did not advise the Applicants that his other client was involved in litigation where it was alleged that he had misused corporate funds for private purposes. He obtained no written waiver of conflicts from any of the parties involved.

Applicants gave Mr. Ordinartsev $65,000 to hold in his IOLTA trust account until all details of the “caviar project” were worked out. Applicants were to receive 65,000 shares of stock in the caviar business. Mr. Ordinartsev gave Applicants no documentation for their investment other than two receipts for the funds. Applicants never received any shares of stock. Mr. Ordinartsev disbursed the $65,000 as follows: he paid $20,000 to his other client, which Mr. Ordinartsev wrote was “for purchasing processing equipment, personal expenses, etc.”; $25,000 to a subsidiary company “for purchasing processing equipment and operation expenses”; and $20,000 to himself “for legal services associated with ‘caviar project.’” Mr. Ordinartsev stipulated that when he made these distributions, he knew that was not what the Applicants intended be done with their money. Applicants never authorized any of their funds to be paid to Mr. Ordinartsev.

Among other misconduct, the Stipulation to Discipline provides that “by disbursing [Applicants’] investment funds in a manner inconsistent with what [Applicants] had been led to believe would be done with, and what they wanted done with, those funds, [Mr. Ordinartsev] violated . . . RPC 8.4(c) [“Engage in conduct involving dishonesty, fraud, deceit or misrepresentation”].” Mr. Ordinartsev stipulated to payment of restitution to Applicants of $20,000. The Committee approved payment of that amount, and denied the balance as an investment transaction not compensable from the fund.

R. Stuart Phillips (WSBA No. 29701; Indianola; disbarred): Applicant hired Mr. Phillips to seek payment on a disability insurance policy she had purchased through her credit union when she took out a car loan. She says that she became disabled and unable to work, so asked the credit union for an insurance claim form. She says the insurance claim manager refused to allow her to submit a claim on the grounds that her claim was disqualified because of a pre-existing condition. Her insurance policy was cancelled. Phillips wrote letters to the credit union and to the insurance company. As a result of those letters, the insurance policy was reinstated and the insurance paid the loan payments as of the date of Mr. Phillips’s letter. However, after that, she could not contact Mr. Phillips; his phone was disconnected, and she discovered that his office was closed. Applicant received one billing from Mr. Phillips. It shows payment of $500 by Applicant, fees for meeting with client and for the letters totaling $201.60, and a credit balance of $298.40. Mr. Phillips never refunded the balance or accounted to Applicant for her funds. The Committee approved payment of that amount.

Randall L. St. Mary (WSBA No. 4331; Everett; disbarred): Mr. St. Mary represented Applicant in a personal-injury lawsuit against the city of Everett. After he filed a complaint, Defendant moved for summary judgment, which was granted with prejudice when Mr. St. Mary failed to appear in court. Mr. St. Mary told Applicant they could reopen her claim after they had obtained an expert witness. At Mr. St. Mary’s request, Applicant paid him $1,225 to pay the expert witness’s fees. Mr. St. Mary had not told her the case had been dismissed with prejudice. When she learned that the case had been dismissed, she requested return of her $1,225. Mr. St. Mary did not respond and has not returned Applicant’s $1,225. The Committee approved payment in that amount.

Chul Shirts (WSBA No. 24993; Vancouver; disbarred): The Committee previously paid two applications regarding Mr. Shirts. Applicant paid Mr. Shirts $430 to seek a modification of child support. According to the hearing officer’s findings, she called Mr. Shirts nearly weekly for several months, and also went to his office, but she could never reach him. She heard through family members that her ex-husband had been served with papers, but she checked the court file and nothing had been filed. Mr. Shirts never filed the petition and proof of service. He never accounted for the $430 and never returned her funds. He was ordered to pay $430 restitution, and the Committee approved payment of that amount.

Gregory S. Wilson (WSBA No. 12012; Tacoma; resigned in lieu of disbarment): The Committee previously paid two applications regarding Mr. Wilson. Applicant paid Mr. Wilson $1,000 to apply for permanent residency. One of Mr. Wilson’s staff members told Applicant to purchase a cashier’s check for $470 payable to the INS. He says that after he gave Mr. Wilson the cashier’s check, he heard nothing further. The next time he heard from Mr. Wilson was when he received a letter dated April 20, 2004 stating that, due to health problems (Mr. Wilson was suspended on May 13, 2004), Mr. Wilson would be unable to represent him and that he had referred Applicant’s case to another attorney. Applicant called Mr. Wilson’s office and was told that they would send his file, his $1,000 fee payment, and the cashier’s check to the new attorney. (Mr. Wilson is to be distinguished from Gregory M. Wilson of Greenacres.)

Applicant contacted the new attorney and asked for his files, the $1,000, and the cashier’s check. The attorney said he never got them from Mr. Wilson. A WSBA staff member contacted Mr. Wilson who said that he could not find Applicant’s file. He also said that he had received a $470 cashier’s check, but he did not know what happened to it except he had never cashed it. Applicant was advised to contact the bank where he purchased the check to seek a refund of the money. The Committee approved payment of $1,000 to Applicant.

Other business: The Committee reviewed 20 additional applications that were denied for lack of evidence of dishonest conduct, or as fee disputes or claims for malpractice. Four of them were dismissed as full restitution had been made, and one was continued for further investigation.

Restitution: Before payment is made to an Applicant, the Applicant must sign a subrogation agreement with the fund, and the fund seeks restitution from the lawyers. 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 April 30, 2005, seven lawyers were making regular restitution payments to the fund, totaling $2,560 in this fiscal year.

The Committee chair is Olympia attorney James A. Connolly. WSBA General Counsel Robert Welden is staff liaison to the Committee.