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F. Michael Kovach (WSBA No.16788, admitted 1987), of Bellevue, received a reprimand on July 26, 2002, following a hearing. This discipline is based on revealing his client’s secrets or confidences and failing to avoid conflicts of interest in 1998.
In 1993, Mr. Kovach agreed to represent a client in a dispute with the Internal Revenue Service (IRS). Mr. Kovach negotiated a payment agreement for a portion of the client’s debt and advised the client that his remaining debt would be eligible for bankruptcy after August 15, 1997. Mr. Kovach was concerned about the client’s sporadic, but substantial, real estate broker commissions, so he advised the client to quit and obtain a more traditional, lower wage position. On June 25, 1997, the client told Mr. Kovach that the client had already earned $100,000 and expected another $200,000 in the next six months on real estate commissions. On July 17, 1997, the client paid Mr. Kovach $1,200 in fees for the bankruptcy, but still owed Mr. Kovach’s firm $9,000 that could be discharged in the bankruptcy. In January 1998, the client retained a second lawyer to assist in the representation. Mr. Kovach withdrew from the representation, asserted an attorney’s lien on the client’s files and drafted a confession of judgment for the client’s signature. The confession of judgment included the following paragraph: the firm has extended me credit based on financial statements . . .that were materially false regarding my ability to pay these fees, but on which the law firm reasonably relied. I prepared and submitted these statements to them with the intent to deceive them and to cause them to carry my account until such time as I could declare bankruptcy and discharge their debt.” Mr. Kovach’s statement was intended to prevent the client from discharging the firm’s debt in the bankruptcy. The client refused to sign the confession of judgment.
In February 1998, Mr. Kovach filed a civil complaint against the client in the law firm’s name alleging breach of contract and fraud. The complaint included the income information the client provided to Mr. Kovach during the June 25, 1997 meeting. By including this information in the complaint, Mr. Kovach revealed the client’s secrets and confidences. Mr. Kovach did not file the complaint under seal.
Mr. Kovach’s conduct violated RPC 1.6, prohibiting lawyers from revealing client secrets and confidences relating to representation unless the client consents after full disclosure; and 1.7(b), prohibiting a lawyer from representing a client if the representation may be materially limited by the lawyer’s own interests.
Peter Erlichman, Andrew Carter and Joanne Abelson represented the Bar Association. Kurt Bulmer represented Mr. Kovach. Geoffrey Revelle was the Hearing Officer.
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