May 2002

Disciplinary Notices

John Hess (WSBA No. 22308, admitted 1992), of Renton, was disbarred by order of the Supreme Court effective August 8, 2001, following a default hearing. The discipline is based on his failure to diligently represent several clients and failure to properly deal with client funds.

Matter 1: In October 1995, Mr. Hess agreed to represent the wife in a marriage dissolution action. The parties agreed to an independent accounting, with each party paying $750. Mr. Hess was responsible for contacting the accountant and processing the payments through his office. The husband provided his records to the accountant and sent a $750 check to Mr. Hess. The accountant reviewed the records and billed the husband, who referred the charges to Mr. Hess. The accountant asked for a $500 retainer. Mr. Hess failed to pay the retainer, so the accountant returned the documents and declined to do further work on the matter. The husband asked Mr. Hess to forward $100 to the accountant and return the remaining $650 to him. After the husband filed a grievance, Mr. Hess issued a $146.90 check to the accountant. About six months later, Mr. Hess wrote the husband a check for $750. Mr. Hess did not comply with disciplinary counsel's requests for information regarding this grievance.

Matter 2: In December 1995, Mr. Hess agreed to represent a client in a personal injury matter. The client had been injured in a rear-end automobile accident. In January 1996, both the client and Mr. Hess signed a document instructing Mr. Hess to pay the client's chiropractor out of settlement proceeds.

In July 1998, Mr. Hess received $46,000 in settlement proceeds in the client's case. He paid all of the client's medical bills except the chiropractor's. Mr. Hess told the client that he was holding the money for the chiropractor's bill in his trust account, and that he believed the bill should be reduced.

In October 1998, Mr. Hess's paralegal wrote to the chiropractor that no payments would be made until all service fees were removed and the balance reduced by one third. The chiropractor reduced his bill by $1,000. A few weeks later, Mr. Hess paid the chiropractor $1,000, leaving $3,437 outstanding. Although the client repeatedly instructed Mr. Hess to pay the bill, he made no further payments. The chiropractor sent bills to the client, with mounting interest. Mr. Hess did not maintain the disputed funds in his trust account, nor did he comply with disciplinary counsel's requests for information regarding this grievance.

Matter 3: In October 1997, Mr. Hess agreed to represent Mr. A, who, with his stepfather, was a joint tenant on a checking and savings account containing approximately $10,000. After Mr. A's mother died, his stepfather became involved with Mr. A's former wife. Mr. A became concerned about his stepfather's welfare and withdrew $10,000 from the joint account. Although Mr. A offered to return the funds, the stepfather filed a lawsuit against Mr. A. Mr. Hess advised Mr. A to give him the $10,000 for deposit in his trust account to pay any settlement or judgment. In the answer Mr. Hess drafted for the client, he stated the funds had been placed in a sealed bank account.

In April or May 1998, Mr. Hess informed the client that he had withdrawn $1,200 from the $10,000 for attorney's fees. Mr. Hess refused the client's requests to return the money to the trust account. The client discharged Mr. Hess and asked for a refund of the remaining funds. Mr. Hess wrote the client a check for $8,500, noting that he was holding $300 for potential costs. After the client left the office, Mr. Hess stopped payment on the check.

In May 1998, Mr. Hess wrote the client a replacement check for $6,305.05. He also gave the client a document called "costs and fees," indicating he spent 27.37 hours on the client's case for $3,694.95 in attorney's fees. Mr. Hess had not billed the client for these amounts and did not keep contemporaneous records of the time he spent on the client's case. Mr. Hess and the client arbitrated their fee dispute. The arbitrator awarded Mr. Hess $650 and required him to refund $3,244.95 to the client.

At the time of the hearing, Mr. Hess had not paid the arbitration award, nor did he maintain the disputed funds in his trust account. Mr. Hess did not comply with disciplinary counsel's requests for information regarding this grievance.

Matter 4: In November 1997, Mr. Hess agreed to represent a client in a personal injury matter. The client had been injured in a May 1995 automobile accident. Prior to contacting Mr. Hess, the client received a $15,000 settlement offer. Upon Mr. Hess's advice, the client declined the offer. Mr. Hess and the client agreed that the client would send Mr. Hess reminders of the statute of limitations in her case. The client sent a reminder on March 26, 1998; Mr. Hess filed a complaint on May 15, 1998. Mr. Hess's paralegal signed the summons and complaint.

In September 1998, the court dismissed the client's lawsuit with prejudice, based on the defendant's claim that the suit was not properly commenced prior to the expiration of the statute of limitations. Mr. Hess did not submit a response to the motion or attend the hearing. The court also imposed statutory attorney's fees against Mr. Hess's client. Mr. Hess took no action on the client's request that he attempt to reopen her lawsuit.

In March 1999, the client retained new counsel. New counsel asked Mr. Hess to provide a declaration to support the client's request to reopen the case. Mr. Hess agreed to provide a declaration, but did not do so. Based on Mr. Hess's refusal to provide the declaration, the client's new counsel determined that it was unlikely the court would set aside the dismissal. Mr. Hess did not comply with disciplinary counsel's requests for information regarding this grievance.

Matter 5: In April 1998, Mr. Hess agreed to represent a client in a trial de novo of an arbitration award. The client had sustained back injuries and hearing loss in an automobile accident. The arbitrator awarded the client $6,714.54 plus costs. The client, who paid Mr. Hess $3,000 in advanced costs, was not able to contact Mr. Hess during summer and fall 1998.

The client appeared for the March 16, 1999 trial. While the client waited in the hall, Mr. Hess told the judge and defense counsel that he could not continue with the trial because of an anxiety disorder. The judge continued the trial and stated he would award costs to the defendants if counsel filed a motion. Mr. Hess told the client that the trial was continued because of his heart problems; however, Mr. Hess never rescheduled the client's trial.

In May 1999, the court dismissed the client's case for failure to prosecute. Mr. Hess did not inform the client that the court had dismissed his case. Mr. Hess also failed to provide the client with a refund or an accounting of the costs and fees in his case. Mr. Hess did not comply with disciplinary counsel's requests for information regarding this grievance.

Matter 6: In May 1998, Mr. Hess agreed to represent a client in a lease and purchase of a Domino's Pizza franchise. The client paid Mr. Hess $2,500 in advance fees. Mr. Hess agreed to draft the agreement so that the client could retain the profits and accept liability for operating the store prior to closing the sale. The client was selling a Domino's Pizza in Maryland while purchasing one in Washington. Mr. Hess did not prepare the necessary lease and purchase agreements, and failed to attend a meeting with his client and the planned sale closing. The client attended the closing without counsel and was required to pay an additional $3,000 as pre-sale profits because Mr. Hess had not drafted the agreement.

After the closing, the client retained a second lawyer to contact Mr. Hess about a refund of his $3,000. Mr. Hess told the new lawyer that he would return a portion of the fees; however, he did not return any fees to the client until after the client filed a grievance, when Mr. Hess paid the client $1,000 and gave him a promissory note for $1,500. Mr. Hess made no payments under the promissory note, nor did he comply with disciplinary counsel's requests for information regarding this grievance.

Matter 7: In December 1998, Mr. Hess agreed to represent a client who was attempting to purchase a home. During the home purchase, an $8,000 child-support arrearage appeared on the client's credit report. Just before the home purchase was to close, Mr. Hess told the client that he could do nothing further to reduce the child-support arrearage. On January 8, the client paid the arrearage in full.

In April 1999, the mother served the client with a petition to modify child support. Mr. Hess agreed to file an answer for the client in this matter. After several weeks of unsuccessfully trying to contact Mr. Hess, the client discharged him and asked for a refund of his fees. Mr. Hess did not refund the client's fees, nor did he comply with disciplinary counsel's requests for information regarding this grievance.

Matter 8: In April 1999, Mr. Hess agreed to represent the father in a motion seeking primary residential placement of his children and a release from the mother stating that he was current on his child-support payments. The client paid $2,000 in advance fees and agreed to pay an additional $1,000. The client told Mr. Hess that the children were in danger and that the case must go forward immediately.

The client called several times during April, and then asked for his money back. Three days later, Mr. Hess called the client and promised to take care of the case immediately, promising a refund if the client was still unhappy. Mr. Hess's legal assistant made an appointment for the client to meet with Mr. Hess on Sunday, April 25. The client appeared and waited two hours, but Mr. Hess failed to appear. Mr. Hess did meet with the client two days later and drafted a declaration. The client made significant corrections to the declaration and completed a financial declaration; however, Mr. Hess did not contact the client after their meeting.

On May 11, 1999, the client sent Mr. Hess a $25 check to cover the costs of mailing his file. Mr. Hess cashed the check and failed to send the client's file or refund his retainer. Subsequently, the client filed a small-claims action in King County District Court. In June, the client received portions of his file; Mr. Hess mailed the remainder of the file to the client in August 1999. The court awarded the client a $2060.90 judgment that was later satisfied by Mr. Hess's appeal bond. Mr. Hess did not comply with disciplinary counsel's requests for information regarding this grievance.

Mr. Hess's conduct violated RPCs 1.14 (a)(2), requiring lawyers to maintain disputed funds in their trust accounts; 1.14 (b)(4), requiring lawyers to promptly deliver client funds to clients upon request; 1.15(d), requiring lawyers to protect clients' interests upon termination of the representation; 8.4(c), prohibiting lawyers from engaging in conduct involving dishonesty, fraud, deceit or misrepresentation; 1.4, requiring lawyers to keep clients reasonably informed about the status of their matters; 1.1, requiring lawyers to provide competent representation; and 1.3, requiring lawyers to diligently represent their clients.

Marsha Matsumoto represented the Bar Association. Mr. Hess represented himself. The hearing officer was William P. Bergsten.

John O. McLendon (WSBA No. 1187, admitted 1969), of Spokane, has been disbarred by order of the Supreme Court effective March 7, 2002, following a stipulation. The discipline is based on his failure to diligently represent two clients, failure to abide by two clients' decisions to accept settlement offers, and entering into a business transaction with a client in 1998 and 1999 without giving the client a reasonable opportunity to seek independent advice.

Matter 1: In March 1995, Mr. McLendon agreed to represent a client in a personal injury matter. Mr. McLendon negotiated with the insurance company, but did not convey the company's settlement offers to the client. In August 1997, Mr. McLendon finalized a settlement with the insurance company, without the client's consent.

Matter 2: In May 1995, Mr. McLendon agreed to represent a client in a personal injury matter. The client had been injured in an April 1995 auto accident. Mr. McLendon negotiated with the insurance carrier, but did not negotiate a settlement prior to the statute of limitations running on the client's claim in April 1998. Mr. McLendon did not file or serve a lawsuit on the client's claim prior to the statute of limitations running.

In June 1998, when Mr. McLendon realized the statute had run, he tried to negotiate a $7,500 settlement. When the insurance company refused to negotiate, Mr. McLendon faxed a letter attempting to accept a June 3, 1997 $6,500 settlement offer. Mr. McLendon did not discuss these settlement offers with his client.

In June 1999, Mr. McLendon proposed a settlement of the client's malpractice claim against him, without advising the client to seek independent representation.

(This same client had been involved in a second automobile accident in October 1996.) Mr. McLendon settled the client's case without her knowledge or permission.

Mr. McLendon's conduct violated RPCs 1.3, requiring lawyers to diligently represent clients; 1.2, requiring lawyers to obtain clients' authority prior to accepting settlement offers; 1.4, requiring lawyers to keep clients informed about the status of their matters; 1.8(h), prohibiting lawyers from settling malpractice claims with unrepresented former clients without advising the former client in writing that independent representation is appropriate.

Timothy J. Parker and Randy Beitel represented the Bar Association. F. Lawrence Taylor Jr. represented Mr. McLendon. The hearing officer was Robert Redman.

Clark T. Ransom (WSBA No. 10925, admitted 1980), of Rainier, was disbarred by order of the Supreme Court effective March 4, 2002, following a default hearing. The discipline is based on lack of diligence, unfair business transactions with a client, and failure to protect two clients' interests when closing his practice in 1999.

Matter 1: In early 1999, Mr. Ransom began representing Mr. O on several matters, including an ongoing bankruptcy. The client consulted Mr. Ransom for advice on how to realize his investment in a parcel of real property to obtain funds to pay off his creditors. The client needed financing to build a road though the property to provide access to 13 subdivided lots. Mr. Ransom suggested that his brother might be interested in investing in the client's subdivision project.

In March 1999, the client met with Mr. Ransom and his brother regarding a possible investment. The client learned that an undeveloped parcel of land in Poulso was available for sale. The client hired Mr. Ransom to work with him in this purchase along with Mr. H, who was to provide the financing. The client would log the land and sell the lumber, and together they would subdivide and sell the individual lots. In exchange for doing the necessary legal work on this project, Mr. Ransom agreed to accept 20 percent of the profits, and told the client he would create a corporation to handle the transaction. Mr. Ransom did not form a corporation, but did print letterhead with a corporate name, listing himself as president.

In May 1999, Mr. Ransom wrote the client a letter on corporate letterhead offering to finance the $35,000 cost of road construction in exchange for being repaid out of the first available proceeds, and a fee of $2,000 for each of the 13 lots to be sold. The client accepted the offer, and another lawyer filed a motion asking the bankruptcy court to approve the plan.

In June 1999, Mr. Ransom attempted to register the corporate name with the Washington secretary of state. Upon discovering that a corporation already existed under that name, he registered under a different name, listing himself as the sole director and registered agent. The bankruptcy court approved the loan from the first unregistered corporation.

In August, Mr. Ransom obtained a $25,000 loan for the corporation from his brother. The corporation promised to pay the brother $30,000 before January 1, 2000. Mr. Ransom deposited the money into a bank account in the corporation's name. Over the first few weeks in September 1999, Mr. Ransom made several withdrawals from this account, including checks made out to himself, his video business and his son. Mr. Ransom did not pay the contractors who were logging the Poulsbo property and did not complete the services contract for the road.

In mid-October 1999, Mr. Ransom told his brother that he was closing his law practice and moving to Arizona. Mr. Ransom was representing Mr. O when he left Washington, and failed to notify his client of this decision, and to answer disciplinary counsel's questions about this matter.

Matter 2: In April 1999, Mr. Ransom represented Mr. and Mrs. R in an appeal from a Department of Licensing (DOL) administrative law judge's decision imposing a $19,710 tax and fee assessment against their trucking business. Mr. Ransom mailed the clients' petition for reconsideration one day after the 10-day deadline.

On May 7, 1999, the DOL director denied the clients' petition because it was not timely filed. The director's decision also explained the procedures for judicial review. Mr. Ransom filed the clients' petition for judicial review more than 30 days after the deadline, and failed to serve the DOL and the attorney general for another three weeks. The clients were unable to contact Mr. Ransom, so they called the assistant attorney general working on the case. The clients learned that their petition was filed late and that the attorney general had filed a motion to dismiss their petition. The clients then learned that Mr. Ransom had left the state and that they could pick up their file from his 17-year-old son. The clients retained new counsel and negotiated a settlement with DOL. Mr. Ransom failed to respond to disciplinary counsel's requests for information regarding this matter.

Mr. Ransom's conduct violated RPCs 1.3, requiring lawyers to diligently represent their clients; 1.4, requiring lawyers to keep clients reasonably informed about the status of their matters; 1.15(d), requiring lawyers to take steps to protect clients' interests after terminating representation; 8.4(c), prohibiting conduct involving dishonesty, fraud, deceit or misrepresentation; and RLD 2.8(a), requiring lawyers to promptly respond to disciplinary counsels' requests for information regarding disciplinary investigations.

Kevin Bank represented the Bar Association. Mr. Ransom represented himself. The hearing officer was William Nielsen.