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Kenneth P. Schmidt (WSBA No. 14677, admitted 1984), of Yakima, was disbarred effective September 11, 2003, by order of the Washington State Supreme Court following a default hearing. This discipline was based on his conduct between 1999 and 2001 involving practicing with a suspended license, lack of diligence in four client matters, theft of client funds, and filing a false answer in the disciplinary proceeding.
Matter 1: The Washington State Supreme Court suspended Mr. Schmidt's license to practice law, effective July 24, 2001, for failure to pay WSBA license fees. During a July 26, 2001, deposition, Mr. Schmidt stated falsely under oath that he had "written to the Bar and sent them a check." At the time of his suspension, Mr. Schmidt had contracts to represent clients for the Yakima County Department of Assigned Counsel (DAC). Mr. Schmidt did not notify DAC, his clients, or opposing counsel of his suspension. Mr. Schmidt knowingly continued to represent several clients during his suspension. In October 2001, the DAC director learned of the suspension and asked Mr. Schmidt to prepare a list of his cases and return his files. Mr. Schmidt did not prepare the list or promptly return the files.
Matter 2: In 1987, Mr. Schmidt represented a client in a Labor and Industries claim. Mr. Schmidt set up a living trust for the client's L&I pension and Social Security Supplemental Disability Insurance payments. Mr. Schmidt managed the client's trust. In January 2000, Mr. Schmidt deposited one of the client's checks into his IOLTA account and did not transfer any of the funds to the client.
Matter 3: In November 1999, Mr. Schmidt became the trustee for a minor child, when the mother died. Mr. Schmidt opened an account for the child using the mother's life-insurance proceeds. In April 2000, Mr. Schmidt transferred $15,000 from the child's account into an account held for another client. He then took $100 of this money in cash, transferred $5,900 to his personal bank account, and transferred $5,000 into his law-office account. Mr. Schmidt depleted the remaining $4,000 in small increments for other clients. During the investigation of this matter, Mr. Schmidt falsely told disciplinary counsel that the $15,000 were his "personal funds from an inheritance in the amount of $15,000 which were mistakenly deposited into [the client's] account." Disciplinary counsel subpoenaed Mr. Schmidt to appear at a deposition and produce proof of his inheritance claim. Mr. Schmidt failed to appear for the deposition.
Matter 4: Mr. Schmidt represented a client who was injured in a May 1997 automobile accident. Mr. Schmidt notified the insurance company that he represented the client, but took no further action. The insurance company closed its file when the statute of limitations expired on the client's claim.
Mr. Schmidt's conduct violated RPCs 5.5(a) and 8.4(d), by continuing to practice law after suspended by order of the Washington State Supreme Court; 1.15 (a)(1), by failing to terminate representation if continuing would violate the RPCs; 8.4(l), by failing to discontinue practice upon suspension; 8.4(b), (c) and (i), by making a knowingly false statement under oath during a deposition and wrongfully obtaining control over client funds (theft); 8.4(l), by failing to notify clients, employer, and opposing counsel of his inability to continue representation; and failing to file written response to grievances and appear at deposition when subpoenaed; 1.15(d), by failing to take steps to protect clients' interests upon termination; 8.4(c), by providing a false Answer to First Amended Formal Complaint; and 1.3, by failing to take action on a client's claim prior to expiration of the statute of limitations.
Joanne S. Abelson represented the Bar Association. Kenneth P. Schmidt represented himself. Veronica Alicea-Galvan was the hearing officer.
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