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Craig Palmquist (WSBA No. 5516, admitted 1974), formerly of Seattle, has been disbarred by order of the Supreme Court effective January 28, 1998, entered after a default disciplinary hearing and Disciplinary Board review. The Court also ordered Palmquist to pay costs of the disciplinary proceedings of $4,317 and restitution of $265,453. The discipline is based upon his abandonment of practice, misappropriation of client funds, and neglect of client matters.
The discipline arises from Palmquist’s representation of 14 separate clients in their tax or tax-related bankruptcy matters. Palmquist requested that nine clients each deposit money with him ($5,000 to $20,000) for the purpose of presenting the IRS with an offer in compromise of the client’s tax debt. Palmquist used the funds for his own business or personal purposes. He did not deposit seven of the clients’ funds to a client trust account. When clients inquired about their funds, he told them that he was processing the offer in compromise and holding the funds in trust to transmit to the IRS. Further, he did not complete the processing of the offers in compromise with the IRS as promised.
Palmquist also used for his own purposes more than $100,000 of funds that three other clients deposited with him to pay to a third party. Palmquist had solicited one client to invest in a parcel of real property with him and others, falsely representing to the client that the property had been purchased.
Palmquist also set up bank accounts for two other clients and, without the clients’ knowledge or permission, added his own name to the account signature cards and withdrew more than $40,000 from the accounts, using the funds for his own purposes.
Palmquist received $2,500 toward fees from another client, and, after minimal work, withdrew from representation two weeks later. He refused to refund any of the amount, claiming it had been a nonrefundable fee. The client understood the $2,500 to be an advance fee deposit because Palmquist had not mentioned the word "nonrefundable" but stated he would work for $125 per hour and would place the funds in trust. The client had written the check to "Craig Palmquist Trust Acct." Palmquist did not deposit the funds to a trust account.
Palmquist failed to keep three clients informed about the status of their matters. One client phoned for two months to determine the status of his audit without receiving a return call. A second client’s Chapter 13 bankruptcy was dismissed because Palmquist had not told the client to appear at the Meeting of Creditors, of the necessity to make plan payments, or of the Chapter 13 Trustee’s notices regarding these matters. A third client hired Palmquist to file two years’ tax returns. Although the client provided all necessary information, Palmquist delayed nine months in filing them. After the client terminated Palmquist’s services, Palmquist litigated a redetermination of the IRS’ tax deficiency for more than a year without her knowledge or permission.
The abandonment of practice violated RPC 1.1, 1.2, 1.3, 1.4, 1.15, 8.4(c), 8.4(d), and RLD 1.1(c) & (p). The misappropriation of client funds violated RPC 8.4(b) & 8.4(c). The failure to deposit funds to a client trust account violated RPC 1.14. The neglect of client matters and failure to keep clients accurately informed violated RPC 1.2, 1.3, 1.4, & 8.4(c). The failure to withdraw when discharged violated RPC 1.15. The totality of the conduct demonstrated unfitness to practice law in violation of RLD 1.1(p).
The Hearing Officer was Thomas Bigsby of Everett. Respondent did not appear in the proceeding. The Bar Association was represented by Disciplinary Counsel Joy McLean.
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