October 2005

Lawyers' Fund for Client Protection

by Robert Welden

The Lawyers’ Fund for Client Protection Committee (LFCP) 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, whose members are the Fund’s trustees. At their meeting on August 19, 2005, the Committee took the following actions:

David A. Ambrose (WSBA No. 21764; Edgewood; suspended): The Committee previously approved four applications regarding Ambrose, who stipulated to a two-year suspension. The conditions for reinstatement to practice include restitution to various parties.

Applicant A: Applicants paid Ambrose for representation in a property dispute with their neighbors. Their neighbors had filed a timber trespass action against them, and Applicants had filed a pro se Superior Court complaint against the neighbor and two fence companies. Ambrose said he would seek a summary judgment, that it would cost no more than $4,000, and he would likely recover attorney’s fees. Ambrose filed a Notice of Appearance, but there were no other court filings or appearances by him.

Applicants heard nothing from Ambrose so they began calling him and left messages on his door, with no response. Ambrose called and apologized for the delay. He said that to complete the process, he needed $1,000 more. Applicants mailed him a check for $500. He scheduled an appointment to meet with Applicants to complete interrogatories. At the meeting, Ambrose said that he had been in contact with the neighbor’s lawyer and that there was a strong possibility that they could settle the case. During that meeting, Applicants gave Ambrose a check for $500. Ambrose said he would send them a copy of the interrogatories when they were filed. They never received a copy, and nothing was ever filed.

About two weeks later, Applicants spoke with Ambrose who told them he was in negotiations with the opposing lawyer, and that he needed another $500 to file for summary judgment. Applicants mailed him a check for $500 on November 6, 2004. They also gave Ambrose checks for $250 on December 5, 2004, and $250 on December 7, 2004.

The next time Applicants heard from Ambrose was a letter stating that he was withdrawing from representing them because of “a stipulated suspension due to major depression,” and that they should seek legal counsel immediately. They then learned that an order had been entered dismissing the neighbors from the lawsuit and that a judgment was entered against Applicants, awarding attorney’s fees in the amount of $10,875. They also learned that Ambrose had never filed any pleadings or appeared in court.

During the investigation of this matter, the opposing counsel said that after an initial contact with Ambrose, he couldn’t figure out what was happening. His calls and letters went unanswered, and Ambrose never responded to motions he filed in court. He said that there were never any offers of settlement, and that as far as he could tell, Ambrose did nothing on Applicants’ case. The Committee approved payment of $4,000.

Applicant B: Applicant paid Ambrose $500 to evict a tenant from a mobile home. When Applicant had not heard from Ambrose, she called him. He told her he was preparing the necessary documents, and that he would mail her copies. When she heard nothing further, she called him again and he said he would mail the documents immediately. After another week, she tried calling him repeatedly from her home phone, but got no answer. In mid-February, she was told by the mobile home park owners that the were going to remove the mobile home because the tenant was not paying the ground rent. She called Ambrose from a friend’s phone and he answered. He told her that everything was under control, that he had spoken with the mobile home park owner, and that the owner was evicting the tenant. Applicant called the owner and he said he was not evicting the tenant.

Applicant went to Ambrose’s office but he said he was too busy to see her. She returned, and, after waiting two hours, Ambrose opened his door. He gave her a copy of a letter that he said he had mailed to the tenant. In his stipulation to discipline, Ambrose admitted that he had never mailed the letter. Applicant fired Ambrose and asked for a refund. Ambrose did not respond. Ambrose stipulated to pay restitution of $500, and the Committee approved payment in that amount.

Dana P. Gelman (WSBA No. 20147; Tacoma; disbarred):

Applicant A: Gelman represented Applicant in personal-injury claims from two automobile accidents. He failed to file the first claim within the statute of limitations. He agreed to represent her on the second claim for no fee.

The second claim settled for $14,027.40. Gelman paid Applicant $9,925.02, reimbursed himself $181 for costs, and withheld $3,921.38 to pay PIP reimbursement to an insurer. He and the insurer agreed that Gelman was entitled to one third of the $3,921.38 as his fee.

When Applicant learned that the insurer had not been paid, she called Gelman. He said there was a “mix-up” and that he would take care of it. He said he would pay her one-third of the amount of the insurer’s PIP claim, apparently representing their proportionate share of his fees. He told Applicant to meet his mother at a bank to receive her check. Gelman’s mother gave her a cashier’s check for $1,307.13. Gelman also agreed to pay the balance to the insurer within two weeks. Gelman did not pay the balance of $2,083.87 to the insurer but instead converted the funds to his own use. In his stipulation, Gelman agreed to pay restitution to Applicant and the Committee approved payment of $2,083.87.

Applicant B: Gelman represented Applicant in a personal-injury claim that was settled for $11,000. He gave Applicant a settlement statement showing a 31.5 percent contingent fee ($3,465), which he paid to himself; $200 for “close file”; $163 withheld to pay a medical bill; and $1,827 to reimburse an insurer for their PIP claim. He paid the balance of $5,345 to Applicant.

Subsequently, Applicant received a letter from her doctor’s office that they had spoken with Gelman about the $163 they were owed, and he told them that Applicant had agreed to pay the bill. Gelman never paid the insurer’s reimbursement or the medical bill, and never accounted for the $1,990 he withheld from Applicant’s settlement. He stipulated to pay $1,990 restitution to Applicant, and the Committee approved payment of that amount.

Applicant C: Gelman represented Applicant in a personal injury claim that was settled for $2,545. Gelman paid himself a one-third contingent fee of $847.49, and costs reimbursement of $84.77. He paid Applicant $817.74. Gelman told Applicant he was retaining the balance of $795 to reimburse an insurer for their PIP claim. He never paid the claim and instead converted the funds to his own use. Gelman stipulated to pay Applicant restitution of $795, and the Committee approved payment in that amount.

Applicant D: Applicant paid Gelman $1,500 to represent his son in a marriage dissolution. He complained that Gelman “made no effort to proceed in a diligent and satisfactory manner.” A search of the county Superior Court docket disclosed that Gelman never filed a dissolution proceeding. Gelman would not respond to Applicant’s or his son’s phone calls, letters, e-mails, or faxes. They hired a new lawyer who commenced a dissolution proceeding. The new lawyer received Applicant’s file from Gelman and found “it was a mess.” It had incomplete drafts of pleadings that Gelman had prepared, but nothing was completed or filed. The Committee approved payment of $1,500 to Applicant.

Kevin M. Kopra (WSBA No. 29651; Seattle; suspended):

Applicant A: Applicant paid Kopra $1,500 for representation regarding his debts. He was being evicted from his condominium. Kopra filed a Chapter 13 bankruptcy petition. Applicant also gave Kopra $17,500 to try to negotiate with the condominium association and to settle the bankruptcy. Kopra also agreed to represent Applicant on a DUI. Kopra transferred $1,500 from his trust account as a “retainer” for the DUI.

Subsequently, Kopra gave Applicant $2,725 of his money back to pay some expenses. Kopra used $250 to pay a court cost, and gave Applicant $500. At this point, Kopra should have been holding $12,575 of Applicant’s money in his trust account.

Kopra never completed the bankruptcy, which was dismissed. Applicant then hired a new attorney to complete the bankruptcy and to recover his funds from Kopra. Kopra did not respond to the attorney’s letter demanding return of the funds. Kopra filed for personal bankruptcy. Applicant filed an adversary proceeding for recovery of the funds and obtained a default judgment. He has been unable to collect on the judgment. The Committee approved payment of $12,575.

Applicant B: Applicant paid Kopra $1,500 regarding a claim against a truck driver for damage when delivering Applicant’s travel trailer. After that, Applicant heard nothing from Kopra. Finally, Applicant was able to speak with him, and Kopra said he was having personal problems. He offered to return Applicant’s $1,500, but he failed to do so. The Committee approved payment of $1,500. 

Applicant C: Applicant hired Kopra to file a lawsuit on behalf of his fiancée against a roofing company. He paid $1,500 as fees and $200 for advanced costs. Kopra never filed the lawsuit and failed to respond to Applicant’s requests for information about the case. On the occasions that he was able to speak with Kopra, Kopra would say he was about to file the lawsuit, but he never did. In reviewing the client’s file, it appeared that Kopra had done no work on the case. Applicant fired Kopra and demanded a refund. Kopra told Applicant he would refund his money, but he never did. The Committee approved payment of $1,700.

Terry O. Forbes (WSBA No. 5626; Everett; interim suspension):

Forbes abandoned his law practice and a custodian was appointed pursuant to ELC 7.7 to protect Forbes’s clients’ interests. He took custody of Forbes’s trust account which contained $71,603.37. A WSBA auditor attempted to reconstruct the account and identify the ownership of the funds in the account. However, records were incomplete and there were a large number of deposits and withdrawals that could not be identified with any specific client. Because of the lack of records, the custodian and bar counsel concluded that there is no basis on which “a reasonably prudent lawyer maintaining a client trust account” could determine the ownership of these funds as required by ELC 7.7(b).

The Committee voted unanimously to petition the Supreme Court to transfer the money currently in Mr. Forbes’s trust account into a separate account under the LFCP control; and to ask the Court for guidance on the procedure to use in disbursing this money, including but not limited to: 1) how long the Fund should retain the funds; and 2) the factors the Fund should consider in disbursing competing claims.

Other Business

The Committee recommended an amendment to APR 15 to provide for exoneration from liability for the Fund, committee members, trustees, staff, and persons communicating with the Fund regarding applications. The rule is based on the exoneration from liability rule in the Rules for Enforcement of Lawyer Conduct.

The Committee reviewed 16 additional applications that were denied for lack of evidence of dishonest conduct, or as fee disputes or claims for malpractice. The Committee also denied reconsideration of a previous decision, and deferred action on two applications to the next meeting.

Board of Governors Action

The members of the Board of Governors serve as trustees of the Fund. At their meeting on July 29, 2005, they took the following action regarding Terry O. Forbes (WSBA No. 5626; Everett; Interim suspension): The Fund trustees approved an interim emergency payment pending the outcome of discipline against Forbes. Forbes deposited $86,380.48 into his trust account from the proceeds of the sale of Applicant’s house. After a few disbursals, he should have been holding $72,230.48 belonging to Applicant. He has never accounted for Applicant’s funds. Because Applicant is facing eviction and other serious financial hardships, the trustees approved this interim payment pursuant to Rule 6(g) of the Fund Procedural Rules.

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 it listed in restitution orders. As of June 30, 2005, seven lawyers were making regular restitution payments to the Fund, totaling $2,838 in this fiscal year.

Annual Report

Pursuant to APR 15(h), an annual report is filed with the Washington State Supreme Court on the activities and finances of the Fund. The Committee met four times this fiscal year to consider 121 applications to the Fund involving 51 lawyers. They approved payments on 47 applications totaling $147,247.09. The full report is available on the WSBA website at http://www.wsba.org/-lawyers/groups/lawyersfund or by calling the WSBA Service Center at 800-945-WSBA or 206-443-WSBA.    

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