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Robert E. Beach III (WSBA No. 6710, admitted 1976), of Spokane, was suspended for three years, effective March 24, 2010, by order of the Washington State Supreme Court following a default hearing. Upon reinstatement to the practice of law, Mr. Beach will be on probation for two years. This discipline is based on conduct involving trust account irregularities, failure to review and maintain trust account records, failure to properly supervise a non-lawyer, and failure to cooperate with Bar Association investigations.
Mr. Beach authorized his non-lawyer assistant to make deposits to his trust account, write checks, and maintain trust account records, with little or no oversight. In January, February, and July 2005, Mr. Beach’s assistant paid for her personal credit card expenses of out of the trust account, totaling $14,764.72. The assistant was not entitled to the funds. When she paid her personal expenses from the trust account, the assistant entered false or incomplete information in the check register, including identifying a fictional client matter in connection with a disbursement. In several instances, she issued checks to her creditors, but entered different payee names in the check register, such as “Treasurer” and “Robert Beach.” Had Mr. Beach reviewed the bank records and check register, the discrepancies would have been apparent.
Mr. Beach received trust account overdraft notices in April 2006 and February 2007; on or about March 13, 2007, Mr. Beach informed the Association that his trust account appeared to be short $29,313.32 in client funds. The Association conducted an audit of Mr. Beach’s real estate trust accounts for the period from January 1, 2005, through October 31, 2007. Even after Mr. Beach was notified of the April 2006 and February 2007 trust account overdrafts, the Association’s grievance investigation, and the shortages in his trust account, he failed to determine the cause of the shortages or ensure his handling of client funds and trust account records were in compliance with the RPC. Due to the shortages, the mortgage pay-off for a seller in a real estate transaction was delayed, clients and third parties were denied funds to which they were entitled, and there were insufficient funds in the trust account to reimburse all clients or third parties who had funds on deposit with Mr. Beach. In all, Mr. Beach owed a total of $38,016.59 to clients and third parties for whom he handled real estate transactions.
As of October 31, 2007, Mr. Beach had disbursed more funds on behalf of 13 clients and third parties than those clients and third parties had on deposit with him, and his trust account was short $43,794.96 in client funds. Mr. Beach covered these disbursements with funds belonging to other clients and third parties. The shortages in the trust account occurred, in part, due to Mr. Beach’s assistant’s use of the funds to pay her personal expenses.
Mr. Beach also failed to respond fully, promptly, or accurately to the Association’s repeated requests for information and records, thereby requiring the Association to subpoena him for his deposition and bank records.
Mr. Beach’s conduct violated former RPC 1.14(a) and current RPC 1.15A(c)(1), requiring all client funds be maintained in an interest-bearing trust account, holding property of clients and third persons separate from the lawyer’s own property; former RPC 1.14(b)(4) and current RPC 1.15A(f), requiring prompt payment or delivery to the client funds which the client is entitled to receive; current RPC 1.15A(h)(8), prohibiting disbursements for a client or third person to exceed the funds of that person on deposit, and/or using funds of a client or third person on behalf of anyone else; former RPC 1.14(a) and current RPC 1.15A(h)(1), prohibiting deposit of or retaining lawyer funds in a trust account; former RPC 1.14(b)(3) and/or current RPC 1.15A(h)(2), RPC 1.15B(a)(1), RPC 1.15B(a)(2), and/or RPC 1.15B(a)(8), requiring a lawyer to maintain complete and current trust account records, checkbook registers, client ledgers, and copies of reconciled client ledgers of all client funds of which the lawyer has possession; current RPC 1.15A(h)(6), requiring the lawyer to reconcile trust account records as often as bank statements are generated, reconciling the check register balance with the bank statement balance to the combined total of all client ledger records; and former and current RPC 5.3(b), requiring a lawyer having direct supervisory authority over a non-lawyer to make reasonable efforts to ensure that person’s conduct is compatible with the professional obligations of the lawyer.
Marsha A. Matsumoto represented the Bar Association. Mr. Beach did not appear in person or through counsel. Erik S. Bakke Sr. was the hearing officer.
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