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Gregory P. Cavagnaro (WSBA No. 17644, admitted 1988), of Bellevue, was ordered to receive a reprimand on August 15, 2008, by order of the Washington State Supreme Court imposing reciprocal discipline in accordance with an order of the United States District Court for the Western District of Washington following approval of a stipulation. This discipline is based on conduct involving failure to withdraw from representation in violation of the rules, failure to disclose material facts to the court, and failure to properly supervise a non-lawyer assistant.
On May 3, 2005, clients met with Mr. Cavagnaro and his paralegal regarding filing a Chapter 13 bankruptcy petition. On that same day, Mr. Cavagnaro electronically filed on behalf of the clients a Chapter 13 bankruptcy petition and schedules with the United States Bankruptcy Court. At the time they filed the petition, the clients owned an interest in a property on which they resided. The property was their principal asset.
In December 2005, Mr. Cavagnaro obtained information revealing that a relative of the clients owned an interest in the property. Although the date on which Mr. Cavagnaro obtained the knowledge that the clients were actively involved in an adverse possession action is disputed, the bankruptcy petition schedules electronically filed by Mr. Cavagnaro were based on a petition and schedules the clients had previously filed in an earlier bankruptcy proceeding which had been dismissed by the court on motion of the trustee in that bankruptcy. The prior filings included information regarding an adverse possession action and the clients’ counsel in that action. The schedules filed by Mr. Cavagnaro list the adverse possession action as pending. In February 2006, Mr. Cavagnaro learned that the clients had asserted third-party claims in the adverse possession action, and that those claims survived the settlement of the adverse possession action.
• Mr. Cavagnaro did not disclose to the bankruptcy court the existence, ongoing status, or settlement of an adverse possession action involving the clients’ property or of the multiple third-party claims made by the clients within the adverse possession action.
• Despite receiving confirmation of settlement of the adverse possession action in February 2006, Mr. Cavagnaro did not seek or obtain the necessary bankruptcy court approvals for the clients continued participation in the adverse possession action, for the settlement of the action, and for quitclaiming part of their property to plaintiffs in the adverse possession action.
• Mr. Cavagnaro did not inquire into the existence of title insurance and the representation of the clients by another law firm in the adverse possession action. Such inquiry would have led to the discovery that a title company had paid settlement proceeds of $230,000 to one of the clients’ relatives, who paid most of those proceeds to the clients soon after receipt.
• Mr. Cavagnaro left his paralegal unsupervised prior to an important uncontested hearing in the clients’ bankruptcy action and failed to contact his office prior to and following the hearing. During this time, Mr. Cavagnaro’s paralegal engaged in actions (including giving the clients legal advice, filing several pleadings in the bankruptcy, and negotiating with counsel for one of the clients’ unsecured creditors) without Mr. Cavagnaro’s permission or knowledge.
• Mr. Cavagnaro failed to obtain the clients’ original signatures on documents filed in the bankruptcy action.
Mr. Cavagnaro asserts that the clients denied him permission to make disclosure regarding the adverse possession action to the bankruptcy court. The clients dispute this, but do acknowledge that they forbade Mr. Cavagnaro from speaking to their attorneys in the adverse possession action.
Mr. Cavagnaro’s conduct violated former RPC 1.15(a)(1), requiring a lawyer to withdraw from representation of a client if the representation will result in a violation of the Rules of Professional Conduct; former RPC 3.3(a)(2), prohibiting a lawyer from knowingly failing to disclose a material fact to a tribunal when disclosure is necessary to avoid assisting a criminal or fraudulent act by the client; RPC 5.3(a), requiring a lawyer who individually or together with other lawyers possesses comparable managerial authority in a law firm, to make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that the non-lawyer assistant’s conduct is compatible with the professional obligations of the lawyer.
Scott G. Busby represented the Bar Association. Leland G. Ripley represented Mr. Cavagnaro. |