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Sidney S. Rodabough (WSBA No. 4819, admitted 1972), of Kent was suspended for two years effective October 1, 2002, by order of the Supreme Court following a hearing on the facts and a stipulation to the sanction. This discipline is based on his failure to avoid conflicts of interest, dishonest conduct and failure to cooperate with the disciplinary investigation between 1992 and 1998.
In 1992, Mr. Rodabough agreed to represent a client in a mortgage foreclosure action. The client sold his condominium to a purchaser who assumed the underlying mortgage, with no novation of the deed of trust. When the purchaser defaulted, the client continued to make the mortgage payments and wanted to make sure that his payments did not benefit the defaulting purchaser. Mr. Rodabough and the client agreed that the client would pay off the outstanding balance on the deed of trust through a “straw man”, to prevent the purchaser from benefiting from the payments. In addition, they agreed that Mr. Rodabough and the straw man would own the condominium if Mr. Rodabough paid the client the amount due on the deed of trust, plus 9% interest 11 months after recording of the assignment of the deed of trust. Additionally, Mr. Rodabough agreed to rent out the condominium and use the proceeds to pay for interest, real estate taxes and condominium fees. Mr. Rodabough did not explain the conflict of interest to his client, obtain a written waiver of the conflict, or advise his client to seek independent advice.
In December 1992, the client paid the balance owing on the first deed of trust and Mr. Rodabough assigned the deed to his legal assistant, the “straw man”. Mr. Rodabough promised the legal assistant a 50% share in any profits from the condominium sale. On August 10, 1995, Mr. Rodabough paid the client the accumulated interest from December 1992 through the end of August 1995. Mr. Rodabough made no other payments to the client. The client requested that his name be placed back on the title. Mr. Rodabough stopped communicating with the client and did not change the title. During 1994 and 1995, Mr. Rodabough listed the condominium as his property on his income taxes, declared rental income and took depreciation deductions.
In 1998, the client filed a civil lawsuit against Mr. Rodabough. Mr. Rodabough did not answer and the client received a $48,332.66 judgment against Mr. Rodabough. On October 8, 1998, Mr. Rodabough filed a Chapter 13 bankruptcy petition. He did not list the condominium as an asset and told the court that it was owned by a friend. Mr. Rodabough listed a substantially smaller gross income than he reported on his income tax returns. Mr. Rodabough failed to cooperate with the Disciplinary Counsel’s investigation of this matter.
Mr. Rodabough’s conduct violated RPCs 1.7(b), prohibiting lawyers from representing clients in matters in which the lawyer’s representation may be materially limited by the lawyer’s own interest; 1.8(a), prohibiting acquiring a business interest adverse to the client, unless the terms are fair and reasonable and disclosed in writing to the client, and the client has a reasonable opportunity to seek independent legal advice in the transaction; 8.4(c), prohibiting conduct involving dishonesty, fraud, deceit or misrepresentation; and RLD 2.8, requiring lawyers to promptly cooperate with disciplinary investigations.
E. H. Knapp Jr. and Linda Eide represented the Bar Association. Kurt Bulmer represented Mr. Rodabough. Patricia H. Wagner was the Hearing Officer.
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