| Description: |
Carl J. Gaul II (WSBA No. 8341, admitted 1978), of Everett, was suspended for 60 days, following a hearing, by order of the Supreme Court, effective August 15, 2002. Mr. Gaul was reinstated to active practice on October 16, 2002. This discipline was based on a conflict of interest, and failure to properly protect and disburse client funds in 1993.
In 1993, Mr. Gaul represented Mr. and Mrs. P. The Ps wanted to sell their house, but because the house was on registered land, the sale could not close until Mr. P's first wife's estate had been probated. Some of Mr. P's sons wanted to appoint a guardian for Mr. P and replace him as personal representative of his first wife's estate. Although Mr. Gaul did not prepare a written fee agreement, he told the clients that the case would cost around $20,000. Between July 1993 and January 1994, the clients paid Mr. Gaul $15,600.
During this time, Mr. Gaul learned that the clients owned undeveloped property on a creek. In August 1994, the house sale closed and the clients asked Mr. Gaul to deposit their $44,452 check into an interest-bearing account for them. Mr. Gaul misplaced the clients' check for about a month and then deposited it into his trust account with the notation "estate payment hold." From August 1993 through April 1994, Mr. Gaul did not explain that Mr. P could have immediate access to this money and that it did not need to remain in his trust account.
In spring 1994, the clients decided to move to California and asked Mr. Gaul to release their funds. Mr. Gaul stated that he would release the funds if the clients secured his fees with a deed of trust on the creek property. The clients did not authorize Mr. Gaul to use the sale proceeds for his attorney's fees, but agreed to Mr. Gaul's request for the deed of trust on their undeveloped property because they needed their money to close the sale of a house in California. Mr. Gaul prepared the deed of trust. The deed referenced the entire undivided five acres of property, and secured payment of current and future fees. Mr. Gaul did not advise the clients to seek independent legal advice prior to signing the deed of trust. After the clients signed it, Mr. Gaul released all but $3,000 of their funds. He retained this amount for ongoing attorney's fees.
In December 1993, Mr. Gaul filed a third-party complaint against one of the son's lawyers. The court dismissed the complaint and imposed $2,500 in terms against Mr. Gaul personally. Mr. Gaul told the clients that they should pay the terms and that he would use the funds remaining in the trust account to make the payment. The clients objected. Mr. Gaul paid the terms with the clients' money despite their objections.
Mr. Gaul's conduct violated RPCs 1.14(a), requiring lawyers to deposit and maintain client funds in a trust account and keep complete records of client funds, and prohibiting commingling a lawyer's personal funds with client funds; 1.14(b) (2), requiring lawyers to safeguard client property; 1.14(b)(4), requiring lawyers to promptly deliver client funds to the client upon request; 1.8(a), prohibiting entering a business transaction with the client unless the transaction terms are fair, reasonable, and fully disclosed in writing to the client; the client is given a reasonable opportunity to seek independent counsel; and the client consents; and 1.4, requiring lawyers to explain matters to the extent necessary for clients to make informed decisions regarding the representation.
Marsha Matsumoto and Kevin Bank represented the Bar Association. Leland Ripley represented Mr. Gaul. The hearing officer was Mark Wheeler. |