| Description: |
Grace Wagner (WSBA No. 16129, admitted 1986), of Snohomish County, was ordered censured following a hearing. This discipline is based on Ms. Wagner’s failure to perform and communicate with a client, and failure to disclose a material fact to a third party.
In 1990, Ms. Wagner finalized a client’s (Mr. T) dissolution action. In December 1991, she entered a real estate transaction with this client. On December 24, 1991, Ms. Wagner signed a real estate purchase and sale agreement for a house (the Lombard house). She paid the $1,000 earnest money deposit with a promissory note signed "for Mr. T." Mr. T was denied the bank loan for the purchase.
In February 1992, a second dissolution client (Mr. S) invested in the Lombard house with Mr. T. Together the two clients obtained a HUD loan and signed closing papers on April 14, 1992. Just prior to the transfer of funds, Mr. S. had second thoughts, and Ms. Wagner advised him of several ways to get out of the deal. Mr. T also spoke to Ms. Wagner about getting out of the deal.
Upon Ms. Wagner’s suggestion, Mr. T donated the house to an Everett charity. Ms. Wagner paid the bank $7,444.69 to close the transaction and considered this a donation to the charity. Mr. T and Mr. S signed quit-claim deeds transferring their interests to the charity. Ms. Wagner did not advise either client of their continuing liability for the mortgage, and took no steps to advise the bank of the transfer. HUD, which allows acceleration of the mortgage if the debtor transfers the property without prior HUD approval, will not normally approve a transfer if the successor will not occupy the property as a primary or secondary residence.
On June 4, 1992, Mr. T’s former spouse filed a petition for modification of spousal support. Ms. Wagner represented Mr. T in this matter. At his deposition on September 23, 1992, Mr. T testified about his real property in Gold Bar. Opposing counsel asked him if he owned other property or had purchased and sold any real estate since July 1990. Mr. T responded that he had not, because he did not believe he had sold the Lombard house. Ms. Wagner took no steps to correct Mr. T’s deposition testimony. In early December 1992, the former spouse learned of Mr. T’s involvement in the Lombard house. The arbitrator increased the spousal maintenance, based in part on Mr. T’s failure to disclose the Lombard house transaction.
Ms. Wagner’s conduct violated RPC 1.1, requiring lawyers to competently represent their clients; RPC 1.4(b), requiring lawyers to explain matters to clients to the extent necessary to allow the client to make an informed decision; RPC 3.4(c), requiring lawyers to comply with lawful discovery requests; and RPC 4.1(b), requiring lawyers to disclose material facts to third parties.
Joanne Abelson represented the Bar Association. Kurt Bulmer represented Ms. Wagner.
|