February 2006
Lawyers' Fund for Client Protection
by Robert Welden
The Lawyers' Fund for Client Protection wishes to give notice that an item concerning Anna-Mari Sarkanen, WSBA No. 8984, published in February 2004 in the Washington State Bar News and on the WSBA website, has been withdrawn in its entirety.
The Committee and the Bar Association apologize to Ms. Sarkanen for its publication and regret any resulting damage it has caused her.
Note: This is part two of a two-part report. Part one appeared in January's Bar News.
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 November 18, 2005 the Committee took the following actions:
Donna J. Light (WSBA No. 22465; suspended pending discipline; disbarment recommended) — Light was suspended from practice pending the outcome of disciplinary proceedings. The petition for interim suspension states that she posed a threat to the public because, among other things, she engaged in a pattern of charging clients flat fees for legal work, failed to perform the work, and failed to return unearned fees.
Applicant I: Applicants paid Light $500 regarding a dispute in the purchase of a boat. Subsequently, Light advised the Applicants to file a Chapter 13 bankruptcy petition. In the disciplinary proceeding, the hearing officer found that this was incompetent advice because Light "knew or should have known that the Applicants would lose the boat if they filed a bankruptcy." A fee agreement was signed providing for a fee of $1,500 of which Applicants paid $1,400. The total fees paid to Light, including the original $500, were $2,150. Applicants signed the bankruptcy petition but Light did not file it. She set a meeting with Applicants, but failed to appear. The next day, Applicants' car was repossessed. Applicants hired a new lawyer, who filed a bankruptcy petition, that same day. At a meeting of creditors, Applicants learned that a few days previous, Light filed a bankruptcy petition on behalf of the Applicants without advising them. She was notified by the court clerk that the petition had been filed without the required filing fee, and without required Social Security numbers. The notice advised that if the fee and information was not supplied, the case would be referred to the judge for dismissal. She received a second notice that the trustee would move for dismissal unless she filed missing schedules, statement of financial affairs, and Chapter 13 plan. Light did not comply with the notices. The trustee moved to dismiss, which was granted. Applicants were required to sell the boat they had originally hired Light to protect. The hearing officer ordered restitution and the Committee approved payment of $2,150.
Applicant J: Applicant paid Light $700 to represent him in a Chapter 7 bankruptcy that he had filed pro se. A creditor was trying to execute against his father's savings account at a credit union on which Applicant was listed as joint owner. The credit union filed a Motion for Relief from Stay. Light advised Applicant that he did not need to attend, and Light failed to appear. The credit union's motion was granted and Applicant's petition for bankruptcy was dismissed for failure to appear at the meeting of creditors. The hearing officer found that Light received notice of the dismissal but did not advise Applicant. She took no further action, and the creditor executed on the credit union account. The hearing officer found that Light intentionally failed to return any fees to Applicant. He ordered restitution of $700, and the Committee approved payment in that amount.
Applicant K: Applicant paid Light $900 to represent her in a child custody proceeding that Applicant had filed pro se. Applicant told Light that the father of her child was willing to stipulate to allow Applicant to have full custody of their child. She gave Light all of her paperwork relating to the custody issues. Light said she would draft the necessary papers in 48 hours. After their initial meeting, Applicant could not reach Light, who performed no services for Applicant. The hearing officer found that Light obtained "funds from [Applicant] through fraud and theft by deception and by engaging in deceitful conduct." He ordered restitution of $900 and the Committee approved payment in that amount.
Applicant L: Applicant's boyfriend had been involved in an accident and an insurance company was seeking to recover $67,000 from him. Applicant, her boyfriend, and Applicant's mother met with Light who arrived with no briefcase, notepaper, or business cards. Applicant's mother lent Light her notepad to make notes. Her mother noticed that when Light returned her notepad to her, Light's notes were still in it. They later learned that Light paid $10 to use the office of another lawyer to meet with them. They agreed on a fee of $1,500. Applicant paid Light $100 in cash (for which she was given no receipt) and $400 by check. She also gave Light a post-dated check for $250. They agreed to pay an additional $750 in the following week. Later, Applicant told Light that she had stopped payment on the post-dated check and would not write another one unless Light returned their original documents and provided a receipt for the $100 cash payment. Light said she would mail them that day. Later that day, Applicant got a call from her bank that Light was trying to cash the stop-payment check. The bank confiscated it from Light, and Applicant picked it up. When she got home, there were two messages from Light on the answering machine saying Applicant owed her $3,500 and threatening to sue. Applicant discharged Light and requested a receipt for the $100 and return of Smith's original documents. Light never responded. The Committee approved payment of $500.
Applicant M: Applicants paid Light $450 to represent them in a stepfather adoption. They told Light that the father had agreed to terminate his parental rights in exchange for a waiver of back child support. Light drafted a document titled "Father's Consent to Adoption, Consent to Termination of Parent-Child Relationship and Waiver of Right to Receive Notice of Proceedings." The hearing officer found that had Light "performed minimal and/or reasonable research," she would have known that this was inadequate to effectuate an adoption. He found that "at the time [Light] drafted the Consent to Adopt, [she] knew that she did not know the procedures for effectuating an adoption by consent." After the document was signed, Light tried to file it but the court clerk refused to accept it because it did not comply with the court rules. Light refused to return Applicants' fees. The hearing officer ordered restitution of $450 and the Committee approved payment of that amount.
Applicant N: Applicant hired Light to represent her boyfriend, who was in jail on criminal-assault charges and a child-custody matter. Light agreed to represent him in both matters for $1,500. Light told Applicant she would appear at the arraignment, and that Applicant should have a cashier's check for $1,100 at that time. Light arrived after the arraignment was over and the boyfriend had been returned to jail. Applicant gave Light the check for $1,100. Light told her she would file for temporary custody of the boyfriend's child. Light told her that this could be done even though he was in jail, because she knew a commissioner who would sign the papers without asking any questions. She indicated that she was then going to the jail to meet with him. However, she did not meet with him until one week later. Applicant became concerned when Light failed to visit her boyfriend in jail, and decided to hire another lawyer. Applicant told Light she wanted her money back, but Light told her she had done too much work on the case and could not give her a refund, and that the boyfriend was her client and that only he could fire her. As of that time, Light had never spoken with him.
The new lawyer entered a notice of appearance and request for discovery (Light had not done so). On that day a hearing was held, the boyfriend's bail was reduced, and he was released from jail. Applicant and her boyfriend discovered that Light had told each of them that she had been hired by the other. Applicant and her boyfriend sent a letter telling Light she was terminated, and requesting a refund. The hearing officer ordered restitution to Applicant of $1,100 and the Committee approved payment in that amount.
Applicant O: Applicant paid Light $500 to write a demand letter after her boyfriend signed a lease and then failed to pay rent. Applicant left messages but Light did not return her calls and then her phone was disconnected. The hearing officer found that Light had no intention of providing legal services to Applicant, and intended to obtain funds by fraud and/or theft by deception. He ordered restitution of $500 and the Committee approved payment in that amount.
R. Stuart Phillips (WSBA No. 29701; disbarred) — Phillips represented Applicant's mother, for whom Applicant was trustee, on a one-third contingent-fee basis in a claim against a hospital. Mediation resulted in a settlement of $150,000. Payment was made to Phillips. Applicant received a check from Phillips for $75,000. In an accompanying letter Phillips wrote that he had to make sure there was no subrogation claim to be satisfied, and "I can distribute the remainder in ten days (after their notice period runs)." Applicant did not hear from Phillips again until he reached him in December 2004. Phillips told him he would send the money by Christmas. Applicant heard nothing more from Phillips and the following February he was disbarred. Applicant sent an e-mail to Phillips, which read: "What do I do now, Sir. My mother is coming home today after 6 days in the hospital and 6 weeks in a nursing center. She needs 24 hour care. You sat in her front room and lied to her. I thought you were an honest man. How could you do this to my mom? Would you do this to your mother? I await your response."
Phillips never paid the balance of funds to Applicant nor rendered any accounting for them. The Committee approved payment of $25,000.
Charles E. Robbins (WSBA No. 3976; disbarred) — Robbins and Applicant entered into a one-third contingent-fee agreement with regard to an automobile accident. Robbins settled Applicant's claim against the other driver's insurer for $47,500. Robbins was entitled to a one-third contingent fee of $15,833.33 plus costs totaling $1,012.40. Because the settlement was deemed inadequate, Robbins advised Applicant to file an uninsured motorist (UIM) claim with the insurer of the vehicle he was in. Robbins paid the balance from the settlement to Applicant, but said that he was keeping $8,551.43 "as attorney fees and costs in the pending UIM action." Applicant never agreed to any fees to be paid to Robbins other than the one-third contingent fee as provided for in the written fee agreement. Robbins filed a UIM claim, but it was never settled, and it is currently in arbitration. The Committee agreed with Applicant's position that all work in connection with the automobile accident was to be done pursuant to the written one-third contingent-fee agreement, and that Robbins had no right to pay himself $8,551.43 when he never settled the claim. The Committee approved payment in that amount.
Other Business: The Committee reviewed 10 additional applications that were denied for lack of evidence of dishonest conduct, or as fee disputes or claims for malpractice. Three applications were dismissed, as restitution had been made.
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 November 2005, seven lawyers were making regular restitution payments to the Fund.
The Committee chair is Tacoma attorney Sarah Richardson. WSBA General Counsel Robert Welden is staff liaison to the Committee.
