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Edward Lawrence Lane (WSBA No. 27799, admitted 1998), of Bellevue, resigned in lieu of disbarment, effective March 25, 2011. This resignation was based on conduct in two matters involving conversion of client funds, trust account irregularities, and dishonesty.
While not admitting to the misconduct herein, Mr. Lane agreed that the Bar Association could prove, by a clear preponderance of the evidence, the violations set forth in the Statement of Alleged Misconduct. Those violations are as follows:
Mr. Lane handled the trust and operating accounts for his law firm. In March 2009, the firm received a $400,000 settlement check for a client's personal injury claims, which Mr. Lane deposited into the firm's trust account. Mr. Lane began disbursing part of the settlement in March, but did not provide the client with a settlement statement until August 2009. Mr. Lane also did not promptly remit to the client her entire portion of the settlement, which totaled $209,980.70. Instead, the client received $10,000 in March 2009, $10,000 in May 2009, $10,000 in June 2009, and the remaining balance in August 2009. In addition, instead of promptly withdrawing the firm’s attorney fees, totaling $133,333.33, from the trust account, Mr. Lane transferred the firm's earned fees to its operating account in increments, ultimately transferring more from the trust account than the amount of earned fees on deposit. The amounts in excess of earned fees derived, in part, from the client's share of funds in the trust account, which Mr. Lane knowingly borrowed to pay the firm's expenses (e.g., payroll, rent, taxes, etc.), without the client’s knowledge or authority. Mr. Lane repaid the trust account when funds in the operating account became available. As of August 13, 2009, there was only $167,847.73 on deposit in the trust account, instead of the $179,980.70 of the client funds that the law firm should have been holding. Thus, the firm’s trust account was short $12,132.97.
In August 2009, the client asked to be paid the balance of her settlement proceeds. Mr. Lane deposited $10,000 of his own funds into the trust account and, the same day, issued two checks from the trust account to the client, one for $176,980.70 and one for $3,000.00. Mr. Lane anticipated that the larger check would take longer clear the account because the client intended to use it to pay off her mortgage. The client submitted the check to her mortgage company the next day and, because the client's mortgage was held by the same bank as Mr. Lane’s trust account, the bank immediately transferred $176,980.70 from the trust account to pay off the client's mortgage. The bank declined to honor the $3,000 check due to insufficient funds in the account. The next day, Mr. Lane transferred $2,500 from the law firm's operating account to the trust account and subsequently advised the client to resubmit the $3,000 check for payment at the bank, which the bank cleared.
Similarly, in another client matter, Mr. Lane failed to maintain the client’s $13,299.19 of settlement in the firm’s trust account, and withdrew portions of it to pay some of the firm's operating expenses (e.g., payroll, rent, taxes, etc.), without the client’s knowledge or authority. Mr. Lane ultimately disbursed the funds to which the client and his ex-wife were entitled from the firm's operating account.
Mr. Lane’s conduct violated RPC 1.15A(b), prohibiting a lawyer from using, converting, borrowing or pledging client or third person property for the lawyer's own use; RPC 1.15A(c), requiring a lawyer to hold property of clients and third persons separate from the lawyer's own property; RPC 1.15A(e), requiring a lawyer to promptly provide a written accounting to a client or third person after distribution of property or upon request; RPC 1.15A(f), requiring a lawyer to promptly pay or deliver to the client or third person the property which the client or third person is entitled to receive; RPC 1.15A(h)(1), prohibiting funds belonging to a lawyer to be deposited or retained in a trust account except funds to pay bank charges, funds belonging in part to the lawyer, and funds necessary to restore appropriate balances in the account; and RPC 8.4(c), prohibiting a lawyer from engaging in conduct involving dishonesty, fraud, deceit or misrepresentation.
Leslie C. Allen represented the Bar Association. Mr. Lane represented himself.
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