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Seattle lawyer Nelson L. Christensen (WSBA No.1589, admitted 1967) has been ordered disbarred by the Washington Supreme Court following review of a Stipulation to Discipline. Christensen had been on interim suspension since June 21, 1995. The discipline is based on Christensen’s abandonment of his practice and mishandling of more than $300,000 of client funds.
Abandonment of practice
Christensen operated a law office as a sole practitioner with a general practice oriented to real estate matters. In early 1995, serious shortages in Christensen's trust funds began to surface.
On Friday, May 12, 1995, Christensen left his office and flew to New Zealand. Prior to his departure, he did not inform his clients of his intention to be away from his office or to leave his practice. He also did not so inform his employee or any of the other lawyers in his office suite nor did he notify his clients of his inability to continue their representation, nor did he make any arrangements for any other lawyer to assist his clients in retrieving their files or continuing their representation. Christensen took no action to protect the interests of his clients during his absence. Christensen returned to Seattle 15 months after he left, in August 1996.
Mishandling of Client Funds
Matter 1:
Mr. Christensen was retained to act as the escrow/closing agent for the sale of an apartment building. In connection with that closing, in 1995, Christensen received into his trust account $91,973.17, from which various disbursements were to be made to effectuate the closing. Christensen made disbursements totaling $82,104.03 in connection with this closing; the remaining $9,869.14 was not disbursed. In the settlement statement provided to the parties, Christensen stated that several disbursals had been made when, in fact, those disbursals had not been. Christensen converted to his own use, by paying to other clients or disbursing for his own benefit, the $9,869.14.
Also in connection with this transaction, Christensen negotiated a Sales Commission Agreement whereby the purchaser agreed to pay to the real estate agent a sales commission of $40,000. On May 9, 1995, the purchaser delivered to Christensen the signed Sales Commission Agreement, along with the purchaser's check for $40,000, payable to the Nelson Christensen Trust Account. On May 9, 1995, Christensen deposited the $40,000 into his trust account. Christensen then converted those funds by using them to make disbursals from his trust account to other clients and for Christensen’s own benefit.
Christensen told the real estate agent that he could not disburse the funds from his trust account until Friday, May 12, 1995, and made an appointment for the agent to return at 2:30 p.m. on that day. When the agent arrived for his appointment, Christensen was gone, having departed his office for the flight to New Zealand hours beforehand. Christensen has not disbursed the funds to the agent.
Matter 2:
Christensen was retained to act as the escrow/closing agent for the sale of a tavern. In connection with that closing, in 1995, Christensen received into his trust account $21,341.59 from the purchaser. The escrow instructions provided that $19,047.45 of these funds were to be disbursed to the owners of the building housing the tavern, for back rent and taxes owing. Christensen made disbursals in connection with this closing totaling $1,836.77; the remaining $19,504.82, including the money due the building owners, was not disbursed in connection with this closing. Christensen converted this money to his own use by paying to other clients or disbursing for his own benefit.
Matter 3:
Christensen was retained in March1994 to probate an estate. In December 1994, Christensen received into his trust account $194,113.16 for disbursal to the heirs and to pay his fees of $7,000. After paying his fees and making disbursals to several of the heirs, Christensen converted to his own use by paying to other clients or disbursing for his own benefit funds in his trust account in the amount of $107,994.91 due the heirs.
On March 24, 1995, Christensen provided one heir with a $70,000 check drawn on his general office account. When that check was deposited by the heir on April 14, 1995, it was returned to her unpaid due to insufficient funds. On April 5, 1995, Christensen provided the same heir with a check drawn on his general-office account in the amount of$28,941.20 which was honored by Christensen’s bank. On May 9, 1995, Christensen provided this heir with a cashier's check for $20,000 which Christensen obtained by a check drawn on his trust account in the amount of $20,003 using the funds of other clients.
The remaining balance of $59,050.71 due the heirs remains unpaid.
Matter 4:
Christensen was retained to act as the escrow/closing agent for the sale of real property. In connection with that closing, in 1995, Christensen received into his trust account $45,407.51 from the purchasers, from which various disbursements were to be made to effectuate the closing. Christensen disbursed a total of $38,431.55 in connection with this closing; the remaining $6,975.96 was not disbursed. In the settlement statement provided to the parties, Christensen stated that several disbursals had been made when in fact those disbursals had not been made. Christensen converted to his own use, by paying to other clients or disbursing for his own benefit, the remaining $6,975.96.
Matter 5:
Christensen was retained to act as the escrow/closing agent for the sale of real property. In connection with that closing, in 1995, Christensen received into his trust account $47,143.83 from the purchasers, from which various disbursements were to be made to effectuate the closing. Christensen disbursed a total of $44,241.85 in connection with this closing; the remaining $2,901.98 was not disbursed. In the settlement statement provided to the parties, Christensen stated that several disbursals had been made when in fact those disbursals had not been made. Christensen converted to his own use, by paying to other clients or disbursing for his own benefit, the remaining $2,901.98.
Matter 6:
On March 18, 1994, Christensen was appointed as special administrator of an estate; he was later appointed personal representative of the estate. In the course of his duties as personal representative, Christensen came in to possession of $158,314.87 of funds belonging to the estate.
Without the knowledge, authorization or permission of the court, the attorney for the estate, or the heirs of the estate, Christensen removed funds in his accounts from the estate and/or diverted funds received on behalf of the estate and converted to his own use estate funds in the amount of at least $57,000 by transferring the funds to non-estate accounts where they were disbursed for the benefit of other clients and/or the benefit of Christensen.
Matter 7:
Christensen was retained to act as escrow/closing agent in the sale of real property. In connection with this escrow, in 1995, Christensen received into his trust account $3,000 as earnest money. No disbursals were made in connection with this escrow. Christensen converted the escrow funds by paying these funds to other clients or disbursing these funds for his own benefit.
Matter 8:
Christensen was retained to act as escrow/closing agent in the sale of a business. In connection with this escrow, in 1995, Christensen received into his trust account $10,000 as escrow money. No disbursals were made in connection with this escrow. Christensen converted the escrow funds by paying these funds to other clients or disbursing these funds for his own benefit.
Matter 9:
Christensen was retained to act as the attorney for a purchaser in a real estate sale and exchange pursuant to IRS Code Section 1031. In 1995, the purchaser deposited $25,543.34 to Christensen's trust account to be used in this transaction. No disbursals were made in connection with this transaction. Christensen converted these escrow funds by paying these funds to other clients or disbursing these funds for his own benefit.
Matter 1O:
Christensen was retained to act as escrow agent in the sale of a motel. In 1995, the purchaser deposited $50,000 into Christensen's trust account as escrow money. No disbursals were made by Christensen in connection with this transaction. Christensen converted these escrow funds by paying these funds to other clients or disbursing these funds for his own benefit.
Matter 11:
Beginning in at least 1990, Christensen provided a variety of legal services to a husband and wife. The husband passed away in 1993, when the wife was in her mid-70s. Christensen maintained an attorney-client relationship with the wife until the time of Christensen’s departure to New Zealand in May 1995.
Prior to 1993, the couple had invested proceeds from the sale of their home into an investment company. By 1993, the couple was dissatisfied with this investment and sought to terminate it. In October 1993, Christensen contacted the couple and suggested they invest in a piece of residential real estate as soon as they obtained a refund from the investment company, which they agreed to do. Christensen then wrote to the investment company and advised the company that he would pick up the check himself. Christensen obtained a check from the investment company made out to himself in the amount of $52,696.70, which he deposited into his trust account on October 18, 1993. This transaction is referred to as "Loan 1."
Christensen did not execute a deed of trust or a promissory note in regard to "Loan 1" although he did draft and the couple did sign a document entitled "2nd Deed of Trust Agreement." This document described the transaction as an investment of $52,000 for 12 months, with monthly interest payments at 12%. The monies in "Loan 1" were not, in fact, used for investments but were in fact used by Christensen to fund disbursements to other clients. Christensen did not advise the couple that their money in "Loan 1" would not be used to fund any investment in real estate but was, in fact, a loan to himself which would be used to make disbursals to other clients. Christensen did not advise the couple to seek independent counsel concerning the transaction in "Loan 1." The monies borrowed in "Loan 1" have not been repaid.
In March 1994, Christensen approached the then widowed wife and suggested that she invest $60,000 in additional real estate, which she agreed to do. Christensen received an additional $50,586.11 from the widow, which he deposited into his trust account on April 11, 1994. This transaction is referred to as "Loan 2."
Christensen did execute a promissory note for "Loan 2" and executed, but did not record, a deed of trust for this transaction. The monies in "Loan 2" were not, in fact, used for investments but were, in fact, used by Mr. Christensen to fund disbursements to other clients. Christensen did not advise the widow how her money in "Loan 2" would actually be used. Christensen also did not advise her to seek independent counsel concerning the transaction in "Loan 2." The monies borrowed in "Loan 2" have not been repaid.
In June 1994, Christensen approached the widow requesting an additional loan of $25,000. She gave Christensen a check for $25, "Loan 3." Christensen did not advise the widow to seek independent counsel in regards to "Loan 3." Christensen used the monies received in "Loan 3" to fund disbursals to other clients. On July 8, 1994, Christensen repaid "Loan 3," with interest, using the funds of another client.
On January 24, 1995, Christensen went to the home of the widow, who had returned that same day from a hospital stay due to her heart condition, and requested an additional $40,000 loan. She gave Christensen a $40,000 check, which he deposited into his personal account on January 25, 1995. This transaction is referred to as "Loan 4." The monies obtained through "Loan 4" were then used to purchase a cashier’s check to disburse funds to another client whose funds had previously been deposited in Christensen’s trust account. Christensen did not advise the widow to seek independent counsel in regards to "Loan 4." The monies obtained through "Loan 4" have not been repaid.
Matter 12:
On April 22, 1995, Christensen issued three checks payable to himself. One check was drawn in his capacity as personal representative of the estate described above in Matter 6 in the amount of $20,000; two checks were drawn on his personal checking account, one in the amount of $37,000 and one in the amount of $35,000. On the same day, Christensen, without endorsing the three checks, deposited them into his general office account at his bank. At the time he drew and deposited these three checks, Christensen knew that there were not sufficient funds in the accounts on which they were drawn. Christensen used the deposit of the three checks totaling $92,000 to fund in part the purchase on the same day of a $133,000 cashier’s check for use in completing an escrow transaction for which he had previously received funds into his trust account but had converted to his own use.
On April 25, 1995, the three checks totaling $92,000 were dishonored for insufficient funds.
The bank having insufficient recourse against the cashier’s check, suffered a loss and filed suit in King County Superior Court. On June 27, 1995, the bank obtained a judgment against Christensen in the amount of $85,405.57.
Misconduct
Christensen’s abandonment of his practice violated Rule of Professional Conduct ("RPC") 1.4, RPC 1.15(a)(2) and/or RPC 1.15(d).
Christensen’s conduct as described in Matters 1 through 9 in converting funds constitutes acts involving moral turpitude and/or dishonesty and/or corruption and/or violated RPC 8.4(c) and/or RPC 8.4(d) and/or RPC 1.14.
Christensen’s conduct as described in Matters 1 through 9 in misrepresenting to parties that disbursals had been made and that money was available to make disbursals constitutes a violation of RPC 1.4(a) and/or RPC 1.4(b) and/or RPC 8.4(c) and/or RPC 8.4(d).
Christensen’s conduct in entering into four loan transactions with clients on terms which were not fair and reasonable and/ or without fully disclosing in writing all terms of the loan and/or without providing the clients with a reasonable opportunity to seek the advice of independent counsel violated RPC 1.8(a).
Christensen’s conduct in misrepresenting the nature of two loans made to him by clients violated RPC 8.4(c).
Christensen’s conduct in drawing and depositing checks he knew to be insufficient for the purpose of obtaining certified funds from a bank constitutes an act involving moral turpitude and/or dishonesty and/or corruption and/or violated RPC 8.4 (c).
Christensen’s conduct in abandoning his practice and as described in Matters 1-12 above demonstrate an unfitness to practice law pursuant to RLD 1.1(p).
Stipulation
Christensen and the WSBA stipulated that he should be disbarred. The parties further stipulated that prior to applying for reinstatement to the practice of law, Christensen shall make full restitution. Full restitution was agreed to be $394,200.60, as well as satisfaction of any additional civil judgments or court ordered restitution assessed against Christensen based on the facts outlined above.
The hearing officer was G. Douglas Ferguson. Disciplinary Counsel Maureen Devlin and Randy Beitel represented the WSBA.
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