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Tacoma lawyer Stephen C. Hemmen (WSBA No.8918, admitted 1979) was ordered disbarred effective April 24, 1997, by order of the Supreme Court.
The discipline imposed was pursuant to a January 13, 1997, Stipulation for Disbarment. Hemmen’s disbarment was based upon his misuse of client trust funds and abandonment of his law practice without taking steps to protect his clients’ interests.
I. Procedural History
In late April or early May 1995, Hemmen abandoned his law practice without notice to his clients. He took no steps either before or after abandoning his practice to protect his clients’ interests. Thus, on May 19, 1995, on Disciplinary Counsel’s motion, the Disciplinary Board appointed Tacoma lawyer Shawn Briggs as custodian of Hemmen’s client files and counsel to protect Hemmen’s clients’ interests under Rule for Lawyer Discipline ("RLD") 8.6. Later, on June 2, 1995, Hemmen was suspended from the practice of law for the nonpayment of dues. Disciplinary charges were filed against Hemmen on February 13, 1996 and the disciplinary hearing was set for January 23-24, 1997.
On January 13, 1997, Hemmen signed a Stipulation to Disbarment. The stipulation provides for payment of $1,500 in attorney’s fees and $385.60 in administrative expenses. The stipulation also provided for the following restitution:
Pavee
Restitution Amount
Client C’s Chiropractic Clinic $622.50 plus any interest which may have accrued
Client D $560
Client E $300
The Estate of Client B $1,750
WSBA Fund for Client Protection, $460 as assignee of Client F
Client G $300
II. Facts
A. Misappropriation of Client A’s Funds
Client A’s bankruptcy plan provided that the client would pay a creditor a quarterly payment of $7,500. Client A arranged to have all quarterly payments paid out of Hemmen’s trust account. Client A would give Hemmen a check which would include the amount to be paid the creditor, Hemmen would deposit the check into his trust account, then Hemmen would write a $7,500 check to the creditor’s attorney.
On April 22, 1995, Client A gave Hemmen a $7,500 check for his May 1, 1995 quarterly payment. Hemmen did not deposit the check in his trust account and failed to make the May 1, 1995 quarterly payment to Client A’s creditor’s attorney. Instead, on April 28, 1995, Hemmen cashed the check in return for $997 in cash and a $6,500 "official" check payable to Hemmen. Hemmen cashed the $6,500 "official" check on May 8, 1995. On May 22, 1995, using a $4,300 cashier’s check made out to himself and $3,203 in cash, Hemmen purchased a cashier’s check payable to Client A’s creditor’s attorney, and sent it by certified mail to the creditor’s attorney.
Hemmen also failed to make arrangements to represent Client A’s interests at a May 25, 1995 bankruptcy hearing.
B. Abandonment of Practice and Misuse of Client Trust Fund
Client B
In January 1995, Client B, a long-time client, asked Hemmen to file a Petition for Appointment of Guardian of Client B’s husband. Client B gave Hemmen a $1,000 check at that time as an advance on attorney’s fees. Hemmen deposited the $1,000 check into his general-business account, rather than into his trust account. On March 6, 1995, Client B asked Hemmen about the status of the guardianship, and he asked her for an additional $750, which she paid by check. Hemmen cashed the $750 check the same day. Hemmen never filed Client B’s Petition for Appointment of Guardian prior to abandoning his practice.
Client C
Hemmen obtained a $10,750 personal injury settlement on behalf of Client C, and agreed to pay Client C’s costs and chiropractic bill out of his 33% contingency fee portion of the settlement. Hemmen did not pay the chiropractic bill, nor did he retain sufficient funds in his trust account to pay the bill prior to abandoning his practice. Hemmen acknowledged his responsibility to supervise his staff’s handling of trust account matters.
Client D
In March 1995, Client D retained Hemmen to file a Bankruptcy Petition on her behalf. Over the next month, she paid Hemmen his quoted fees of $560. Hemmen did not deposit Client D’s payments into his trust account and treated them as earned fees. However, Hemmen never filed Client D’s Bankruptcy Petition prior to abandoning his practice.
Client E
In March 1995, Client E paid Hemmen $300 toward his quoted fee of $500 to file a Petition for Dissolution and a Motion for Restraining Order. Client E says Hemmen told her she could pay the balance of attorney’s fees once the divorce was final. Hemmen did not deposit Client E’s $300 payment into his trust account and treated the money as earned fees. Hemmen failed to file either the Petition for Dissolution or the Motion for Restraining Order prior to abandoning his practice.
Client F
In October 1994, Client F paid Hemmen $610 to file a Chapter 7 Bankruptcy Petition ($450 in fixed attorney’s fees and $160 for the filing fee). Hemmen deposited the $610 into his trust account. In November 1994, Client F told Hemmen to hold off on doing any work. Hemmen wrote himself a check for $450 out of his trust account one week later, and deposited the check into his general-business account as an earned fee. Both the trust account ledger and the general-business account ledger allocated the $450 to Client F’s case. In February 1995, Hemmen used the remaining $160 in trust to buy a $160 money order and made it payable to the U.S. Bankruptcy Court. In March 1995, Client F told Hemmen she no longer wanted to file for bankruptcy and asked for a partial refund. Client F was never able to contact Hemmen thereafter, and Hemmen abandoned his practice without giving her a refund.
Client F discovered the $160 money order in her client file when she retrieved it from the RLD 8.6 custodian. However, neither the bank nor the U.S. Bankruptcy Court was willing to negotiate the money order on Client F’s behalf until February 1996, after the Association and the appointed RLD 8.6 custodian stepped in to assist her. Client F also was reimbursed $450 from the Lawyer’s Fund for Client Protection. (The Lawyer’s Fund for Client Protection is administered as a trust by WSBA pursuant to Admission to Practice Rule 15.)
Client G
In March 1995, Client G paid Hemmen $300 toward his quoted fee of $800 to file a Bankruptcy Petition on his behalf. Hemmen did not deposit the $300 in his trust account. Two weeks later, Client G gave Hemmen two $100 savings bonds, along with financial paperwork, to assist Hemmen in preparing the Bankruptcy Petition. Hemmen did not file the Bankruptcy Petition prior to abandoning his practice. Later, when Client G tried to retrieve his file from Shawn Briggs, the RLD 8.6 file custodian, he discovered that his original financial paperwork was missing, as were the two $100 U.S. Savings Bonds. In 1996, Hemmen’s estranged wife found the savings bonds in one of the boxes stored with her and returned the savings bonds to Client G.
III. Stipulated Violations
Hemmen stipulated that the Association had sufficient evidence to meet its burden of proving by a clear preponderance of the evidence the following violations of the Rules of Professional Conduct ("RPC") and the Rules for Lawyer Discipline ("RLD"):
1. 1. Hemmen’s abandonment of the practice without notice to his clients violated RPC 1.3 (requiring a lawyer to act with reasonable diligence and promptness in representing a client) and RPC 1.4 (requiring a lawyer to keep clients reasonably apprised of the status of their matters and to promptly comply with reasonable requests for information), and subjects Hemmen to discipline pursuant to RLD 1.1(i).
2. 2. Hemmen’s cashing of Client A’s $7,500 check and personal use of the money was an act involving moral turpitude and dishonesty in violation of RLD 1.1(a); an act of dishonesty in violation of RPC 8.4(c) (conduct involving dishonesty, fraud, deceit or misrepresentation); and/or constitutes a conversion of client funds in violation of RPC 1.14(a) (requiring all funds of clients paid to a lawyer or law firm, including advances for costs and expenses, to be deposited in a trust account), and subjects Hemmen to discipline pursuant to RLD 1.1(i).
3. 3. Hemmen’s misconduct, as stipulated, constitutes conduct demonstrating unfitness to practice law, and subjects Hemmen to discipline pursuant to RLD 1.1(p).
The hearing officer was William Garling, Jr. of Seattle. Hemmen represented himself. The Bar Association was represented by disciplinary counsel Leslie Ching Allen.
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