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Larry A. Botimer (WSBA No. 23805, admitted 1994), of Federal Way, was suspended for six months, effective August 20, 2009, by order of the Washington State Supreme Court following an appeal. For further information, see In re Disciplinary Proceeding Against Botimer, 166 Wn 2.d 759, 214 P.3d 133 (2009). This discipline is based on conduct involving revealing client confidences and conflicts of interest.
After he retired from the IRS, Mr. Botimer established a law practice that focused on tax work. Mr. Botimer served for several years as a tax preparer for the R family. From 1995 to 2000, he prepared yearly tax returns for Mrs. R and, from 1995 to 2001, he did the same for Mrs. R’s son JR and JR’s wife. Mr. Botimer assisted Mrs. R with decisions related to her ownership stake in a Seattle nursing home facility. In 1992, Mrs. R retired from the Seattle business but retained ownership of the property, leasing it back to JR and his wife. Mr. Botimer advised JR and his wife regarding incorporation of the Seattle business as a subchapter S corporation, and he advised Mrs. R about creating a “consulting business” as part of an overall tax strategy. Mr. Botimer also prepared tax returns for the Seattle business.
Mr. Botimer also assisted Mrs. R with business matters related to a Spokane care facility run by her other son, MR. The Spokane facility is incorporated under subchapter S. Mrs. R guaranteed loans for the Spokane facility and secured these loans with her Seattle real property, yet received no stock in the Spokane business. Mr. Botimer advised her as to her options regarding the Spokane facility, including restructuring the business so that Mrs. R could both be involved in management of the Spokane facility and receive potential tax benefits reflecting the Spokane business’s losses on her own tax returns. Controversy arose when MR would not recognize that his mother or brother had an ownership stake in the Spokane business. Both brothers disagreed as to the extent of each one’s stock ownership. Mr. Botimer assisted JR and his wife in negotiations with MR regarding potential solutions. Mr. Botimer did not obtain conflict waivers in the course of his assistance of the various members of the R family and did not discuss with them the advantages and disadvantages of joint representation. Mr. Botimer did not use a written client engagement agreement or any other method to obtain consent in writing to the conflicts.
Mrs. R, JR, and JR’s wife decided to close the Seattle nursing care facility and sell the property in August 2000. The proceeds of this sale were to go to the three family members, with JR and his wife expecting half. Mr. Botimer also requested that his fees be paid out of these proceeds. Upon the sale, Mrs. R did not share the proceeds with JR, JR’s wife, or Mr. Botimer. Instead, she used the proceeds to satisfy her loan guarantees to the Spokane business. In 2002, Mr. Botimer terminated his representation of Mrs. R with a letter stating that “her failure to cooperate with him, refusal to follow his advice and failure to pay for [his] legal services” led to his decision. The letter also informed Mrs. R that Mr. Botimer was sending correspondence to the IRS to inform the agency “that [Mrs. R’s tax] returns do not contain a true record of your taxable income and that you neglected to report gifts made to your son.” Without seeking or obtaining Mrs. R’s consent, Mr. Botimer followed through and sent the letter to the IRS informing the agency of Mrs. R’s failure to, contrary to his advice, correctly state her income and pay gift tax. The letter also contained allegations that Mrs. R had illegally invested her grandchildren’s trust property.
To resolve disputes stemming from the sale of the Seattle property, JR and his wife sued Mrs. R, MR, and the Spokane business in 2004. Mr. Botimer cooperated with JR and his wife’s attorney in the lawsuit, and provided the attorney with three declarations to use in pretrial proceedings. The declarations contained detailed background information about Mrs. R’s business affairs related to the Seattle business, as well as information about her estate plans. He attached copies of Mrs. R’s tax returns and other documents related to his prior tax preparation work. Mr. Botimer also included information describing JR and his wife’s lease of the Seattle property and business transactions with MR as tax avoidance tactics. Mrs. R did not give her consent to these disclosures, and no court ordered this revelation of Mrs. R’s client information.
Mr. Botimer’s conduct violated former RPC 1.6, prohibiting a lawyer from revealing confidences or secrets relating to representation of a client unless the client consents after consultation; former RPC 1.7, prohibiting a lawyer from representing a client if the representation of that client will be directly adverse to another client unless the lawyer reasonably believes that the representation will not adversely affect the relationship with the other client and each client consents in writing after consultation and a full disclosure of the material facts; and former 1.9(b), prohibiting a lawyer who has formerly represented a client in a matter from thereafter using confidences or secrets relating to the representation to the disadvantage of the former client.
Randy V. Beitel and Nancy Bickford Miller represented the Bar Association. Paul E. Simmerly represented Mr. Botimer. David B. Condon was the hearing officer. |