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Nicholas R. Matarangas (WSBA No. 27407, admitted 1997), of Seattle, was disbarred, effective July 7, 2011, and September 16, 2011, by orders of the Washington State Supreme Court following two separate default hearings. The July 7, 2011, disbarment was based on conduct involving failure to act with reasonable diligence, failure to communicate, conversion of client property, trust account irregularities, failure to promptly notify a client of receipt of client’s property, failure to promptly pay a client funds she was entitled to receive, failure to keep complete trust account records, theft, and dishonest conduct. The September 16, 2011, disbarment was based on conduct involving failure to act diligently in a client matter, failure to maintain client funds in a trust account, theft of client funds, failure to protect a client’s interests, and failure to cooperate in a Bar Association investigation. July 7, 2011, disbarment: Client A was a Missouri resident injured while on vacation in Washington. In November 2004, Client A hired Mr. Matarangas, a solo practitioner, to represent her in her personal injury claim. Under their contingent fee agreement, Mr. Matarangas was to receive 35 percent of any settlement amount if a lawsuit was commenced before settlement. Client A’s insurance paid $4,337.40 toward her medical expenses, which needed to be reimbursed to a subrogation service.
After Mr. Matarangas filed suit on Client A’s behalf, the parties reached a settlement for $25,000. On April 10, 2009, Client A signed a receipt and release of her claim. That same day, Mr. Matarangas endorsed and deposited the settlement check into his trust account and wrote himself a trust account check for $8,750, which represented 35 percent of Client A’s settlement. Mr. Matarangas should have maintained $16,250 in his trust account for disbursement to Client A, the subrogation service, and to pay costs. He neither informed Client A of his receipt of her settlement funds, nor of his withdrawal of his fee. On May 4, 2009, Mr. Matarangas wrote a letter to Client A stating, “Once the case is dismissed, [opposing counsel] will tender the check to me which I will deposit to my trust account. Once the check has cleared, I will deduct my fees and costs and pay [the subrogation service] whatever amount we ultimately agree on. I will send the balance to you.” At the time he wrote the letter, Mr. Matarangas knew he had already received and deposited the settlement check and taken his fee. Mr. Matarangas thereafter misappropriated the remaining settlement funds, totaling more than $15,000.
Over the months following Client A’s receipt of Mr. Matarangas’s letter, she left him numerous
messages and numerous emails inquiring about the settlement. Mr. Matarangas did not respond to the voicemails, but did respond to one or more of the emails telling Client A that he was working on her case and negotiating with the subrogation service to reduce the amount to be paid in subrogation. He assured her that payment was forthcoming. From April 10, 2009, through May 4, 2010, Mr. Matarangas withdrew approximately $5,500 of the funds from his trust account. Other than his 35 percent fee, Mr. Matarangas was not entitled to any other funds from Client A’s settlement. A representative from the subrogation service informed Client A that their files showed no contact with Mr. Matarangas after March 2009. In September 2009, Mr. Matarangas was evicted from his leased office space for nonpayment of rent and his address was no longer valid. He did not inform Client A, the subrogation service, or the Bar Association of the change. After Client A filed a grievance against Mr. Matarangas with the Bar Association, Mr. Matarangas sent the subrogation service a check for $2,000 and sent Client A a cashier’s check for $13,188.71, representing the settlement amount less his fee, the subrogation payment, and costs. In his response to the grievance, Mr. Matarangas stated that he had been negotiating to reduce the reimbursement in subrogation and had “felt it would be prudent to hold on to the settlement until the lien issue could be resolved.” Following a subpoena issued by the Bar Association for Mr. Matarangas to appear for a deposition and produce his client file on May 20, 2010, Mr. Matarangas appeared but produced no records. Although he agreed under oath to provide the specified records by June 15, 2010, Mr. Matarangas produced no documents. September 16, 2011, disbarment: Client B hired Mr. Matarangas to represent her in connection with a single-car accident. Client B’s insurance included coverage for personal injury protection (PIP). On January 25, 2010, Client B’s insurance issued a check for $9,616 to Mr. Matarangas to be used toward Client B’s medical expenses. Mr. Matarangas informed Client B that he would hold these funds in his trust account for payment of her medical expenses and deposited the check into his trust account.
On March 19, 2010, Mr. Matarangas withdrew $2,715.53 from his trust account, which he sent to Client B in a cashier’s check. After this disbursement, $6,900.47 should have remained in Mr. Matarangas’s trust account for eventual payment of Client B’s medical expenses. Between January 25, 2010, and March 29, 2010, Mr. Matarangas transferred nearly $8,000 from his trust account to a joint personal checking account he maintained with his wife. Most of those funds belonged to Client B. Mr. Matarangas had not signed any fee agreement with Client B, nor had he issued any invoices to her for his services, and was not entitled to withdraw her funds from the trust account. On March 31, 2010, only $23.44 remained in Mr. Matarangas’s trust account.
Client B subsequently tried to contact Mr. Matarangas to have him disburse the remaining PIP funds to her medical providers, but found it extremely difficult to reach him. To avoid being sent to collections, Client B hired another attorney, who wrote to Mr. Matarangas at his address of record stating that Client B had asked his firm to substitute as her counsel and requesting that Mr. Matarangas forward her file and PIP funds. He received no response. Client B filed a grievance with the Bar association. The Bar Association sent several letters to Mr. Matarangas’s address of record and to his home, questing a response. Mr. Matarangas did not respond to the grievance nor supply the Bar Association with a valid business address.
Mr. Matarangas’s conduct violated RPC 1.3, requiring a lawyer to act with reasonable diligence and promptness in representing a client; RPC 1.4(a), requiring a lawyer to keep the client reasonably informed about the status of the matter and promptly comply with reasonable requests for information; RPC 1.4(b), requiring a lawyer to explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation; 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)(1), requiring a lawyer to deposit and hold in a trust account funds subject to this Rule; RPC 1.15A(d), requiring a lawyer to promptly notify a client of receipt of the client’s property; RPC 1.15(f), requiring a lawyer to promptly pay or deliver to the client the property which the client is entitled to receive; RPC 1.15A(h)(2), requiring a lawyer to keep complete records (of client property) as required by Rule 1.15B; RPC 1.15A(h)(3), allowing a lawyer to withdraw earned fees only after giving reasonable notice to the client of the intent to do so; RPC 1.15A(h)(5), requiring that all (trust account) withdrawals be made to a named payee and not to cash; RPC 1.15A(h)(7), prohibiting a lawyer from disbursing funds from a trust account until deposits have cleared the banking process and been collected; RPC 1.15B, requiring a lawyer to maintain current trust account records and specifying what, at minimum, the records must include; RPC 1.16(a)(3), prohibiting a lawyer from representing a client if the lawyer is discharged; RPC 1.16(d), requiring that, upon termination of representation, a lawyer take steps to the extent reasonably practicable to protect a client’s interests, such as surrendering papers or property to which the client is entitled; RPC 8.1(b), prohibiting a lawyer, in connection with a disciplinary matter, from knowingly failing to respond to a lawful demand for information; RPC 8.4(b), prohibiting a lawyer from committing a criminal act (here, theft) that reflects adversely on the lawyer’s honesty, trustworthiness, or fitness as a lawyer in other respects; RPC 8.4(c), prohibiting a lawyer from engaging in conduct involving dishonesty, fraud, deceit, or representation; and RPC 8.4(l), prohibiting a lawyer from violating a duty or sanction imposed by or under the Rules for Enforcement of Lawyer Conduct in connection with a disciplinary matter.
Natalea Skvir represented the Bar Association. Mr. Matarangas did not appear either in person or through counsel. Lish Whitson and J.C. Becker were the hearing officers. |